00:13
Peter Dunn
Good day. Hi, Peter Pete the planner, host of the pete the planner show. I thought I was going to get the open because my iPad updated. It's a whole thing. Joining me, as always, is Damian Dunn, co host of this little show, the Pete the Planner Experience. Hello, Dame.
00:30
Damian Dunn
I can't not do it. It's guaranteed to happen. Let's do it. Let's go.
00:34
Peter Dunn
I know, that was embarrassing.
00:35
Damian Dunn
That was crazy.
00:37
Peter Dunn
Dame, welcome to the show.
00:39
Damian Dunn
I'm happy to be here.
00:40
Peter Dunn
It is so good to be with you. My friend Russ is texting me right now. Do you have a friend named Russ?
00:45
Damian Dunn
I have one named Ross.
00:48
Peter Dunn
Interesting. It just occurred to me I was going to grab a Miguel out of practicality, actually, not showboating, not out of entertainment. Because I would like one. Do you think as I go grab one, you can carry the show for a second and say hi to people? Saying hi?
01:07
Damian Dunn
Yeah, sure.
01:08
Peter Dunn
Okay. It'll be like 20 seconds run.
01:11
Damian Dunn
We'll count for Pete. Hey, Jameson. Nice to see you again. It's been a long week around the office. We've had some meetings, lots of meetings, and we got a lot of good work done. So what we are looking forward today is doing the show. Wrapping the show up on a Friday is always fun and getting to spend time with you and answering questions, assuming everybody sent them in. And by the way, you should send questions in. If you have been thinking about different stuff and you want us to answer questions, send them in. What's holding you back, Pete? I'm encouraging people to let us help you.
01:48
Peter Dunn
Well, yeah, thanks for doing that. I did get Miguel. Thank you for that. You ruined the sound by saying something over it, which is really it was the all right, everybody. I don't have a busy day. Jameson. Or at least if I do, I'm not telling you about it. How about gotten? So who was it first? Jeremiah was upset that I said I was busy too much, which I both am and slightly a joke. And then someone else weighed in on Twitter in my DMs and was like, hey, seriously? You telling us you're busy is upsetting me. It's like okay, lil spence. Oh, little Spence is back. Morning, fellas. I paid off my debt.
02:32
Damian Dunn
Whoa.
02:32
Peter Dunn
Starting in 2016. Feels great. Time to build up an emergency fund. Thanks for your content, little Spence. You know what? You're going to be feeling like big Spence pretty soon.
02:42
Damian Dunn
Little Spence 50.
02:44
Peter Dunn
They might start calling you big sense dad jokes. Dame. I took my daughter, who just turned 13, to the bank on Monday of this week to switch from the kids account to the teen account.
03:02
Damian Dunn
Now they have a teen account.
03:04
Peter Dunn
So at Chase, where she banks, there's a teen account. You'd be 13. And it's an account. It's a checking account. You can have checks, you can have a debit card. Your parents can see it, but it is your own account, own online. I don't have to approve anything. Like, there's a twelve year old account. I had to approve everything she did on her kids debit card. And so we're going through this process. The nice lady at the bank who was helping us did not know what she was getting into with my daughter. She was like, oh, I'll set up your account. She goes, Set up the account. And then my daughter is a thing. A good, lovely woman girl, 13 year old. And Ollie's just putting this lady through the wringer. Through the wringer. They're like, oh, here's the terms of service. You can just scroll down to the bottom and click Accept.
03:55
Peter Dunn
Ollie freaking reading it. She's reading it. And the woman says something about a fee in her spiel. And then Ollie's combing like, you know, right here, it says, the fee is this. And you said, the fee is that. Why is that? And I'm like, oh, my God. I think we're raising a reasonable.
04:13
Damian Dunn
You know, I'm just stoked that Ollie will now be able to sign up for Columbia House record deals without you.
04:21
Peter Dunn
Totally. Oh, speak of the devil. She has texted me. Oh, there she goes. Everyone in the world is calling or texting me right now. You ever have that? Where you start getting all sorts of buzzes and you're like, is there a natural disaster, like what's happening through a world event?
04:38
Damian Dunn
Is it spring break week in central Indiana?
04:41
Peter Dunn
No. She occasionally, in a passing period or something will send the old man a text.
04:45
Damian Dunn
Oh, how thoughtful.
04:47
Peter Dunn
All right, I got to quit looking at all this stuff. Okay, dame, this week's show, we are talking a couple of different things. Number one, we're going to cover the worst ways to measure your financial health. And then we're going to talk about the best ways to measure your financial health. We're also going to talk about the newest proposal, which would wipe out student loan debt and extend student loan moratorium. More on that biggest waste of money in the news.
05:15
Damian Dunn
I don't know if anybody else, maybe somebody in the comments can say something, but did Pete's sound just change to anybody else?
05:21
Peter Dunn
Your sound just changed to me.
05:22
Damian Dunn
Your sound just changed to me.
05:24
Peter Dunn
How did my sound change?
05:25
Damian Dunn
Now you're back.
05:26
Peter Dunn
That's really weird. What did it do?
05:28
Damian Dunn
You got muted like you were talking through a pillow.
05:32
Peter Dunn
I only hear you in one ear now.
05:34
Damian Dunn
This is shaping up to be amazing.
05:37
Peter Dunn
Maybe you both and I are having a medical event.
05:39
Damian Dunn
It could be no Jameson's having it, too, then muddled.
05:44
Peter Dunn
Oh, good Lord.
05:46
Damian Dunn
It's fine now to me.
05:47
Peter Dunn
It's okay. Okay. It's better now. Oh, my gosh. Who needs that? You know what I mean?
05:54
Damian Dunn
I totally know what you mean.
05:55
Peter Dunn
Yeah. Okay. I don't know. We're going to figure it out. We're not going to figure it out. We're just going to do the show. Fine. Now. Thanks, Jameson. But how's it sound? Okay, here we go. I mean, I got nothing to do after this, but know, might as well do it efficiently, you know. What is it? Is it sounding weird?
06:20
Damian Dunn
No, it's good.
06:21
Peter Dunn
OK, you're in one ear. I don't know why you're in one ear. Is it worth noting that you messed with your settings before the show started today?
06:28
Damian Dunn
Yes, but I fixed it.
06:31
Peter Dunn
No, sure you did. Okay, in three, two, one. This week on The Pete the Planner Show, we answer your money questions. Here's how the show works. Email us. Askpeed@peterplaner.com that's. Askpete@peteeplanner.com and if the sound of my voice is coming through well, because the microphones are working and everything, we'll answer your question. If for some reason the sound is muddled all of a sudden because we're amateurs, ish, then you'll hear sort of a half muddled answer. Joining me, as always is Damian Dunn, vice president of advice at Your Moneyline. Hello, Damien.
07:07
Damian Dunn
You sounded surprised when you said that.
07:09
Peter Dunn
Oh, at your title.
07:10
Damian Dunn
Yeah.
07:11
Peter Dunn
How are you this week?
07:13
Damian Dunn
I'm great. How are you?
07:14
Peter Dunn
I'm good. Sometimes the how we're used, they're sort of just like compulsory, right? They're just like but you're fine. You and I got to see each other. We got to break bread this week with each other, which was sort of nice.
07:29
Damian Dunn
It was a nice little reunion that we had.
07:33
Peter Dunn
You ordered a cocktail that I've been talking you into and it was like a big ordeal. So that was fun.
07:39
Damian Dunn
Yeah. I still can't place it, but it was delicious. But I still can't figure it out.
07:44
Peter Dunn
So a lot of people are interested in their financial health, so they take all sorts of online quizzes and they self evaluate their finances in peculiar ways. And Dame, today we're going to offer you the best way to do that. And I'm not kidding and yes, I am completely biased, but what you need to know is, of course, I'm reading in the comments as we do this here, right now, that people can only hear us in one ear. So I'm so excited when this comes across the radio, across our affiliates that people will hear us through one speaker right now. And so I'm pretty thrilled about that, Dame. Are you?
08:22
Damian Dunn
It's going to be amazing. I'm sure that having the mono, the separate channels, maybe we're lucky and you'll just be on the left side and I'll be on the right.
08:32
Peter Dunn
Alas, let's continue the show. Dame. So we're going to tell people the absolute best way to measure their financial health, but let's start with the ways that stink. And I'm going to start with the most common way that people think they measure their financial health that I think is horrible, and that is credit scores. I think credit scores are borderline dangerous as to what they convince you of in the same way that for some people, measuring your weight is a horrible measure of health. Meaning low weight means you're healthy. High credit scores means you are financially healthy. That's the extension there. I think credit scores are dangerous. Dame, do you share that belief? I assume you do.
09:18
Damian Dunn
I do. I think a lot of people lean on credit scores for, as you said, an overall picture of their health and that's just not the case. We will often have people contact our line saying, well, we got to get my credit score up and maybe they do need to raise their credit score, but it's not this silver bullet that's going to fix all the other problems. In many cases, there are other things that need to be attended to make them more financially healthy and sometimes those are a little bit harder to qualify and sometimes they're not. But credit score overall not a great indicator of your overall financial health.
09:56
Peter Dunn
I have met several people that have amazing credit scores but are absolutely financially a disaster. And I don't say that judgmentally. I say that observationally. And so that scares me. And then I also see people who have really bad credit scores who their current behavior and their current decision making is amazing. And so it's like, okay, so a person has a 640, yet they're saving $1,500 a month and they have no debt and their bad decisions are behind them and they're worse off than someone who is saddled with credit card debt that happens to pay their bills on time, has no money in savings, and has an 810. No thank you.
10:40
Damian Dunn
Yeah. Once you look at what the credit score really captures, there are so many things that fall outside of it that it's pretty easy to explain to somebody this isn't how you want to judge your financial health. You need to take a much broader picture and make sure you've got the fundamentals down to figure out if you are on a path to stability or you're just fooling yourself.
11:06
Peter Dunn
The other one that people commonly use, and I found myself using this one from time to time, is just to look at your bank account balance. Oftentimes people will let their feelings and or their perceptions of their financial life ebb and flow with the bank account. I have money in there. I have more money than I thought should be in there. So therefore I feel good. And Dane, why this one makes no sense to me has more to do with online banking and the debit card than it does anything else. Back in the 1980s when people used a check register to balance their checkbook, so to speak, and actually there was a lot more awareness in a person's financial life. So very rarely did a person guess what was in their account because they knew what was in their account. Now people often guess what's in their account and they often guess wrong.
12:00
Peter Dunn
And sometimes they guess wrong because a transaction hasn't cleared right. And so they'll see their balance and they'll be like, oh wow, there's $280 more in there than I thought there'd be. And they didn't know anyway, but they made a guess. And then they get confidence in that bad gas. They'll be like, well, you know what? Let's go ahead and spend that thing down to what we think it should be. And I say that jokingly, but I'm not joking at all.
12:27
Damian Dunn
No, that balance can feel like just a big warm safety blanket if you aren't taking into account everything else that's going on in your financial life. Maybe you used a credit card a little bit more this month than you normally do, and you're going to have to pay that off. And if you are the type of person who pays that credit card bill every month in full, that balance in your checking or savings account could be very deceptive because you've already spent the money, it just hasn't made the transaction or that leap from your account to the credit card company.
13:01
Peter Dunn
The other banking bad measure is when you have a giant savings account and you look at the giant savings account and you say, wow, this is awesome. This is great. I'm fine. But if you're not building on that and your actual current income isn't showing signs of good behavior, then that giant bank account doesn't matter. Especially in some circumstances. The current behaviors aren't able to reproduce the results that are that bank account. Sometimes, dan, we see this when someone inherits money or there's a windfall of some sort, and so they didn't really do anything to have that stability. And they actually don't have the behavior of stability. They just have the dollars of stability, which don't last that long.
13:46
Damian Dunn
I think this is a really easy thing to fall into. Let's say you do put the work in and you build that saving account balance up and you get to the point where you are comfortable with that emergency fund or whatever you want to view that as. And then you start to consume that bit of your monthly cash flow that helped you get there into other ways. And then the inevitable occurs. You have to dip into that account to pay for some unforeseen circumstance, and yet you don't have the ability to build it back up in your monthly cash flow. It can get really tricky pretty fast if you don't maintain good habits.
14:21
Peter Dunn
Now, the third way that I want to talk about that is better than the other two, but it's not ideal. It does not go far enough is net worth. So your net worth, of course, are your assets minus your debts, and that gives you a number. And while I like net worth and measuring it over time, like every six months or every twelve months, and you can see some changes, it still doesn't give you that snapshot of how healthy are my behaviors right now. So what we're going to do after the break here in a minute or so and then the break, of course, we're going to talk about a derivative of net worth that we came up with a few years ago here called power percentage. And how by calculating your power percentage, you will know more about your financial life than you have ever known before.
15:10
Peter Dunn
What you have felt may be validated one way or the other, good or bad. And so we're going to tell you how to calculate power percentage next. Dame, years ago, you learned about power percentage. What was your previous favorite metric prior to power percentage?
15:28
Damian Dunn
It was probably a combination, honestly, of net worth and balances and accounts.
15:34
Peter Dunn
Yeah, same. But that's why I created power percentage is because I love net worth and I love looking at my balances. But then I started thinking, actually, Mrs. Planner was the I remember were at dinner and she sort of asked me a question I didn't know the answer to, and it led to creating power percentage. So, like all things, kudos to Mrs. Planner. Coming up after the break, I will tell you her discovery and how it can impact your financial life. That's next. I'm Pete the planner. Dane, why don't you leave and come back and see if that fixes the mono to stereo situation. Hang on, everyone else. I've just received three various voicemails while we're on the air. So the question is, should I check these voicemails while I'm on the air with you? Let's see who they are. Let's kind of look in here.
16:22
Peter Dunn
They're being transcribed. That one's not transcribing fast enough. This one I can't actually answer on the air, so maybe I won't do that. Jameson says he loves power percentage, and he is a power percentage is. If you are a personal finance nerd like Jameson is, and many of you are, power percentage is the ultimate metric. You will fall in love with it. I have fallen in love with it, and I hope you do, too, Dame. I hope you're in both of my ears instead of one.
16:50
Damian Dunn
Let's see. Am I now coming through strongly in both of your ears?
16:53
Peter Dunn
No, you're not. In your audio settings. Is it stereo mono? How about on your interface?
16:59
Damian Dunn
There no interface. Has nothing like that. All right, let's check that one.
17:05
Peter Dunn
There you go. Yeah, you're in both my ears now.
17:07
Damian Dunn
Okay, here we go.
17:08
Peter Dunn
What do you do?
17:09
Damian Dunn
Clicked a little button that said stereo audio. And assuming that it was checked would mean stereo. Apparently it does not. You have to uncheck it to get stereo.
17:19
Peter Dunn
I don't even know what's happening anymore.
17:21
Damian Dunn
I don't either.
17:22
Peter Dunn
We're going to get fired from our radio show. You realize that, right?
17:25
Damian Dunn
I'm sorry.
17:26
Peter Dunn
No, I'm not. So let's go. Let's do this. Power percentage time in three, two, one. Back on the Pete the Planner show, dame, it's Power Percentage Day, where we talk about our favorite metric that helps a person understand how a person is doing financially. So it's with that, it's time to explain how a power percentage works. What we're about to do is we're about to give you a list of very healthy financial activities. Very healthy financial activities. And within that list, you are to take the monthly dollars that you commit to these activities, the monthly dollars you commit to these activities. Then you're going to add up all these monthly dollars. So, Dame, the challenge with this sometimes is as we begin to add these numbers up, is I'm going to name like, your 401K deposit, and people will hear 401K balance. I don't want you to put your 401K balance.
18:31
Peter Dunn
I want to put on a 30 day period. How many dollars are you committing to this area on a regular basis? So we're going to go through that. Then we're going to add up all the good activities. We're also going to make sure that people understand what some of the bad activities are that don't get included, that they think are good but are not. And then we're going to divide by a person's gross income, which is their before tax, before benefits, before retirement plan contributions, monthly income, and then we'll come up with a power percentage. So are you ready to go?
19:04
Damian Dunn
Yeah, let's do it.
19:05
Peter Dunn
Do you have the list in front of you? I do. Why don't you fire away first?
19:09
Damian Dunn
Retirement plan deposits. You just mentioned that Pete retirement plan deposits are, as you said, all the money that you put towards your retirement plan and your employer's match of your retirement plan deposits dollars.
19:23
Peter Dunn
So I know that all of us think of retirement plan deposits and percentages, but I'm asking you to convert to dollars as well as your employer's match. Convert to dollars. Get up your monthly amount and write it down, because we're about to add to it. Dame, what is next?
19:37
Damian Dunn
College fund deposits.
19:39
Peter Dunn
If you were putting money in a college fund for yourself, for your kids, for your friend, I don't know, you put it to the list. If you're not doesn't just move on.
19:50
Damian Dunn
Savings deposits with a caveat. You can't count them if they will be spent immediately on vacations, holidays, gifts, things of that nature.
19:59
Peter Dunn
Just occurred to me that caveat would be a great name for a cocktail. I'm going to make one of that anyway. Yes, savings. Regular savings. Savings. That's not earmarked for anything that's there in case you need it. But it's not there for vacations. It's not there for holidays. This would be a regular transfer or regular deposit that occurs on a monthly basis. I encourage you not to guess here. I encourage you to say, this is what we put in. So this is how we're counting it. Don't go well, I probably have $350 left over at the end of the month. That's not this. There has to be action. What else is up?
20:39
Damian Dunn
IRA or Roth deposits?
20:42
Peter Dunn
Pretty straightforward. There either one. Add them up. Next.
20:46
Damian Dunn
Other investment deposits.
20:48
Peter Dunn
Sure. Even crypto, even NFTs, if you put money in on a regular basis. Again, regular deposits. We are looking for habits. We are not looking for once in a blue moon situation. What? That's what we're looking for, Dave.
21:08
Damian Dunn
HSA contributions.
21:11
Peter Dunn
HSA contributions. And there is a caveat here. The caveat is if you happen to be in a situation in which you put money into your health savings account and then always have to pull it right back out because of your health care spend, maybe you have a chronic condition or something like that, you cannot include it. However, if you don't have regular health care expenses that you know are coming and you do contribute to HSA on a regular basis, you get to conclude those deposits. And by the way, sorry, Dan, if you make like a $6,000 deposit at the end of the year, you can go ahead and divide that out to $500 a month. Any of these, including the IRA deposits? If you make a big chunk, just divide it out into twelve to give your monthly amount.
21:57
Damian Dunn
Mortgage principal payments. Principal only.
22:01
Peter Dunn
Yeah. So this messes people up a little bit here. When you make your mortgage payment, some of that payment goes to repay the loan, but a lot of that payment goes to interest expenses as well as other fees and taxes and insurance. We are primarily interested in knowing any given month how much of your payment is being repaid. Right. And so you probably need to go to your mortgage statement to find that out. Damn. At this point in time I have a ten year mortgage. The principal being paid is a vast majority of my payment. It is very lovely.
22:38
Damian Dunn
Yeah, it's a fun little moment when you have that happen in your mortgage payment where you're making just tons of principal payments. Next is medical debt payments.
22:49
Peter Dunn
Medical debt payments, plain and simple. Not the balance, but if you're making regular payments on medical debt, you get to include it.
22:55
Damian Dunn
Credit card payments.
22:56
Peter Dunn
Any credit card payment you can use, except if you're actively using the credit card. We are trying to show and highlight people who are paying down a balance as opposed to people who are carrying balances or using their credit cards for points or airline miles and things like that. So if you are a use my credit card every month and then pay it off every month, you cannot include that credit card payment. Within Power Percentage if you've just joining us on the radio and you're thinking what are these people talking about? We are talking about a concept called power percentage which helps measure how many of your dollars on a monthly basis go towards healthy financial activities. It is a metric called power percentage. We're in the midst of saying what is included in that dame. We have three minutes left to not only complete this list, but then to say what is not included and then do the calculations.
23:46
Damian Dunn
Student loan payments.
23:48
Peter Dunn
Any student loan payment, as long as it's not interest, only gets included in this calculation.
23:53
Damian Dunn
Other debt payments in which you are making consistent monthly payments there you go. Except car payments.
23:59
Peter Dunn
Car payment. And this starts the list of things that are not included. Actually, we will do that after. We also say life insurance premiums.
24:05
Damian Dunn
There you go.
24:06
Peter Dunn
Permanent life insurance premiums that are above the target premium. If you don't know what that means, it is likely that your life insurance premiums don't count.
24:16
Damian Dunn
Do term life insurance payments count?
24:18
Peter Dunn
They do not. Term life insurance premiums do not count. Towards this, I would also note that any car payment of any sort does not count towards this dame. What else does not count?
24:30
Damian Dunn
Savings, deposits allocated to vacation, holidays, or other purchases, as we said. Car vehicle payments, which we said. And interest payments of any kind do not count.
24:42
Peter Dunn
Interest only. Interest payment. Interest only loan payments when you can. Okay. Now add up all the things that we say that count. Add them all up, all of them up. Then divide by your gross monthly income. You are going to get a percentage. And what we're about to tell you now is that percentage you got, good or not, plain and simple. If the percentage you came up with, if the good activities divided by your total gross income is less than 10%. Dane, what should a person take away from this exercise?
25:13
Damian Dunn
There's some work to do. There's plenty of room for improvement.
25:16
Peter Dunn
I'm going to go a little more aggressive there, but I do appreciate your soft touch on that. I'm going to go with, this is very bad. It's aggressive. Yeah.
25:28
Damian Dunn
I would say that's not just a little more aggressive than what I went with.
25:33
Peter Dunn
Yeah. So if your power percentage is 10% or less, it means you're running in place and you either know that or you didn't know that. So some people know they're running a place. Maybe you just had a kid and daycare costs are crazy and you're both working or you're not. I mean, sometimes you run on a treadmill and we totally get this. But if that's not one of your periods of your life that you're in and your power percentage is 10% or less and you're like, we're fine, you're not. You just aren't objectively. You are not.
26:06
Damian Dunn
Eleven to 20%, Pete. That is the next tier.
26:09
Peter Dunn
It's okay. Yeah. I mean I like 20 more than eleven, but it's an okay range. And the thing with power percentage is you want to climb through it. Like you can't be like, I'm a twelve. Next year I'm a twelve. Still a twelve. No, you got to climb at least a percentage a year. I mean, when you first learn about power percentage, your power percentage should go up about 5%, and then once you're taking a look at it, should go up every year by a percent.
26:35
Damian Dunn
Next range, 21% to 34%.
26:38
Peter Dunn
Good. I like it. Yeah. You are on your way to stability. If not there and then 35% or more is great. I would say it's very tough to retire or become financially independent unless you're above 35%. That is power percentage. Dame after the break, a new look at what the latest student loan forgiveness proposal is. All that's next on the Pete the Planner show. I'm Pete the planner. Seriously though, dame this is like another voicemail and three other texts in this, but I'm looking at them. None of them they're not all related. It's just like literally everyone in my life is texting me right now.
27:20
Damian Dunn
Very popular today.
27:22
Peter Dunn
I don't know, I'm annoyed today. I'm almost going to go on the oh, new phone. Who. Dis.
27:28
Damian Dunn
Yeah.
27:30
Peter Dunn
Have you been able to identify the lyrics on the scroll today, dave it's.
27:34
Damian Dunn
Kind of easy because the title appears in the lyrics, like five times in a row.
27:39
Peter Dunn
It does.
27:41
Damian Dunn
Have you seen the live performance of Chris Stapleton and Justin Timberlake? At it was a country music awards where they do this song and one of Justin's songs. It's one of the best live performances I've ever seen. I will send you the link if I please do.
27:57
Peter Dunn
I do like Chris Stapleton. I'm not a big country music fan, but I find him somewhere. Country rock, sort of. I'm okay with that.
28:05
Damian Dunn
A lot of soul.
28:06
Peter Dunn
This is about. Only thing I listen to in that wheelhouse. Like, I'm more of a hip hop head. And I will tell you, there is nothing better than listening to the song Tennessee Whiskey while drinking a glass of Tennessee whiskey in front of a bonfire. It'll make you feel human.
28:24
Damian Dunn
And by bonfire, you mean a solo stove.
28:27
Peter Dunn
That's right, my friend who listens to the show and watches. So J o just texted me. J o. Very funny. Thanks for listening. So my friend J O lives in the St. Louis area. No big deal. She's just a cancer researcher that is taking time away from trying to cure cancer to text us, j O, get back to work. Like, seriously, we need a cure for cancer. Don't listen to oh, J O is the best. All right. Can you imagine that? It's like, what do you do for a living? Oh, I'm curing cancer. That's who she is.
29:00
Damian Dunn
But I'm taking a break by listening to two weirdos.
29:05
Peter Dunn
I mean, we're all needed on this planet, like, everyone's important, really, and we all have different jobs and we all play a different role, but it's tough to get past. Like, what do you do? I cure cancer.
29:17
Damian Dunn
We're that white noise for J O. It lets her zone out and. Just kind of think of nothing for a while.
29:24
Peter Dunn
Yeah, that's how she is. All right. Oh, yeah, that segment. Okay. Ready to go?
29:32
Damian Dunn
Yeah, sure.
29:33
Peter Dunn
I'm not organized today. Go figure. Go figure. Okay. Three, two, one. Back on the Pete the Planner show. Dame, you sent me something this morning about the newest in student loan payment pause and student loan forgiveness. So, Dame, that's what we're going to do right now is we're going to talk about what the newest proposals are and why we keep talking about this, because we've been talking about this now for two years. We've crossed over the two year mark today as we record is I just looked at my watch, and of course, J O texted me again. We're at what is today, the 18 February March, no one knows. Two years. This was Wednesday of the pandemic. Wednesday of sort of the first major week of the Pandemic in 2020. We're two years in. We've been talking about student loan repayment and student loan pause for two years.
30:33
Peter Dunn
Dame, there is a proposal on the table from Senator Patty Murray from Washington calling for President Biden to extend the student loan payment pause to at least 2023 and cancel student loans for borrowers. We are going to talk about this new proposal in two parts. Number one, we're going to talk about it in terms of the pause. And when we talk about that in both of these, we're going to talk about this in a respectful way, okay? Because neither you or I have student, okay. I've never had student loan. Mrs. Planner had some student loans. And so I don't want this to be two dudes shouting down the mountain at what y'all need to like, I don't want that to be the thing here, but I want people to understand the byproduct of what's happening in personal finance around this. And it goes back to student loan payments were paused.
31:29
Peter Dunn
Government stimulus in terms in the form of cash arrived for about two years. And so you've got people's household obligations going down, their household incomes going up, creating this increasing level of discretionary spend. And you're like, oh, my gosh, it's amazing. Yeah. And temporarily, it is pretty neat, but it creates some major dependency issues. It's created amazing inflationary impact. And so the concern here, Dame, is what is punting until 2023 going to do for anyone with such a low unemployment rate?
32:15
Damian Dunn
It's a great question. The cynic says that this is a proposal just as much to get votes as it is to help people who genuinely need help. To figure out if this is the right solution, though goes a little bit further because, as you said, there's so much time now between when this could potentially be enacted and then 2023, because this would have to have an action taken on it very soon to avoid student loan payments being fired back up again in May. So you would like to think that if this were to come to fruition, that people could plan for their student loan payments to start back up, make room for them in their budgets. But I think I know human nature well enough, especially over the last two years, that's unlikely to happen. And so we have to figure out what is the most appropriate way to help people who are genuinely struggling with their student loan payments.
33:19
Peter Dunn
There was a statistic that suggested 86% of people who are not paying their student loans are unprepared to begin repayment. And when you hear that it is jarring, that's a horrible statistic. And while I'm not anywhere near saying, well, that's those people's problem, I will also say I'm not suggesting that 86% of people who are not prepared to pay debt is anyone else's problem. You know what I mean? It's like just because 86% of people feel as though they're not ready to do it doesn't mean there should be wholesale change. It's not a scientific approach to understanding the economics of what's going on.
34:05
Damian Dunn
Well, not only wholesale change for wholesale change's sake, but it doesn't actually address the problem, the root of the problem that gets people to having all of the student loan debt in the first place, with the college costs being just astronomically higher than they were even a decade ago. Two decades for sure, but the cost continues to rise. And if we don't get that abated somehow, then we're going to end up right back here in another 610, 1215 years and we'll have this conversation all over again. So we have to have a solution that not only addresses those that are struggling with their current payments, but to try and prevent it for future students as well.
34:51
Peter Dunn
I do agree with your sentiment that a targeted approach to help people who actually need help the most makes a lot of sense to forgive a physician's student loans is very different than maybe some sort of technician that isn't making nearly as much money as the physician. Senator Murray goes further. Is it Senator or Representative? Oh, boy. I'm not trying to disrespect anyone, senator, sorry, senator Murray. I don't know Washington state politics that well goes on to suggest that student loan cancellation at large comes on the back of this and that it needs to be enacted on a priority basis. Now this is interesting because Damon and I both think there needs to be a targeted approach to this. But her recommendation says that all student loans should be canceled, and that would be all federal loans because you can't cancel private loans, but yet there's a priority order.
35:55
Peter Dunn
And here's the priority order. It would include student loan borrowers of color with low income who have been making student loan payments for 20 years and that left college without a degree or credential. I don't see the prudence of you and I debating each of these bullet points at all thank you. But I will note I want to draw attention to one or two that I think makes a tremendous amount of sense. Those who've been making student loan payments for 20 years or more, I have to admit, do it today, do it absolutely today. Especially if the person is in good standing.
36:40
Damian Dunn
Sure, yeah, I have very little problem with that. The other one says low income. I think I could very easily pair low income with certain occupations. Social workers don't make very much money. They are desperately needed in our society and they go through college and get their degrees just like anybody else. And if we want to continue to keep people in professions like that are valuable to the communities we live in, we probably ought to take a look at making sure that they're encouraged and incentivized to continue doing that work.
37:14
Peter Dunn
So we will leave people with this sentiment. If you were on the verge of beginning your student loan payments again, because in May, you're going to have to, as of right now, make your payments again. It is our show recommendation. I haven't cleared this with Dame. He is actually sort of my boss in this regard. But we're going to go this direction. It is our recommendation that you start paying now, that you do not take further advantage of a pause at the 0% interest rate, because we want you to not get used to this large discretionary monthly gap that will only hurt you whenever repayment starts. It is likely your finances have recovered to some degree, if not all the way since March of 2020. And while inflation arguably is kicking you in the face and us too, it is the best practice to start paying back your student loans.
38:12
Peter Dunn
And for those that say, you know what, I feel you, I appreciate you, or maybe I don't. However, I do not want to because I think this student loan debt is going to be forgiven. And if I make a payment, then I miss out on the hundreds or a couple thousand dollars that would be forgiven. Dame I think that's a bus not waiting for I'm curious what you think.
38:36
Damian Dunn
Yeah, I don't think that's the best tactic in this case. The one exception to this proposal that I can come up with is if you are on track to have your loans forgiven through PSLF during that time period, then it might make sense to just sit back and let things play out. But otherwise you got to start building those payments back into your monthly budget.
38:56
Peter Dunn
Yeah, that's a very important distinction if you work in public service, if you work for a charity, a 501, a school system, a nonprofit healthcare system, any of that whole different set of rules because of the public service loan forgiveness program. Dame coming up after the break, biggest waste of money of the week and the news right here on the Pete the Planner Show. I am the aforementioned Pedro de Pesos. All right. Sort of disorganized this morning.
39:28
Damian Dunn
Your phone's blowing up.
39:31
Peter Dunn
I was distracted. I could only hear you in one ear. My shirt is bad on video because it's small check pattern. So it's keying out. Phones blowing up.
39:41
Damian Dunn
Is that what that's called? Keying. Oh, okay.
39:45
Peter Dunn
Look at you.
39:46
Damian Dunn
The more you know.
39:50
Peter Dunn
Did I make it more, or did someone in our executive make a more, you know, reference.
39:54
Damian Dunn
And somebody I don't remember who it was.
39:56
Peter Dunn
Craig. Craig P. Anderson joined us for a little part of the Exec retreat. That was good. Craig P. If you're watching right now hello. But you're not, probably. Damn. You ready for the rest of the show? Yeah, I got to share my screen, so I didn't do it beforehand, so it's just about to happen. Hi.
40:20
Damian Dunn
We're all going to get a preview of the Blom.
40:22
Peter Dunn
I'm going to start as soon as I share it. Here we go. Three, two, one. This week's biggest waste of money of the week right here on the Pete the Planner Show is the Pro Drive Hunter adventure vehicle. The ultimate all terrain adventure vehicle is a bold claim, yet it's at the top of Pro Drive's page for the Hunter. Based on the BRX Dakar rally car. It's powered by a restriction free twin turbo Ford six cylinder making 592 quick timeout. Dame is 592 lot.
41:05
Damian Dunn
Yes.
41:06
Peter Dunn
Okay. Thanks to the spartan interior, steel tube frame chassis, also pronounced chassis, carbon fiber body panels, and four wheel drive that results in a zero to 62. Time says zero to 62 in the copy.
41:23
Damian Dunn
It's because Pro Drive is a British company, I believe, and they normally do zero to an hour. So 62 is the equivalent you're blowing my mind.
41:34
Peter Dunn
In just under 4 seconds. And a top speed flirting with 180 miles else per hour. It sits on 17 inch wheels with 35 inch tires connected to a double wishbone suspension. Is it available for a price? That means the buyer has plenty of land on which to enjoy their new prize. Dame, you can see this. I'm going to describe it for the folks. I'm not a car guy, so you want me describing this to you. It looks like a Porsche Cayenne that has been smashed. So it's sort of got that feel, but it's just sort of been smushed down. Like you smush a burger bun on top of a burger and flatten it out a little bit. That's what it looks like. Dame, you know a lot of so what I just said, you understood most of those words. Yeah. Okay. What do you think this thing costs?
42:22
Damian Dunn
If Pro Drive is doing it's going to be really expensive. That's going to be 175 grand.
42:30
Peter Dunn
Oh, yeah. That's a really good guess.
42:33
Damian Dunn
Is it?
42:33
Peter Dunn
Yeah, it is. It's unbelievable. This car costs $1,643,000 1,643,000 plus, if you had some options, I think, for floor mats, they throw in a little extra. What?
42:53
Damian Dunn
Basically, you're getting a rally truck for your money here. But I think I'd rather have a rally truck than that.
43:04
Peter Dunn
I'm waiting for some dad in the carpool lane at school to have that. When we pick up my daughter for school in the carpool lane in the middle school, there's this car that's got a student driver sticker on the back. But these people bring their dog with them to pick up their kid every day. And the way the dog's position on the steering wheel, it looks like the dog's the student driver nice and it tickles us deeply. Dane what's in the news this week?
43:28
Damian Dunn
AMC, the movie theater chain invested in a mining company. The movie theater chain spent $27.9 million to become about 22%. Owner of highcroft, a gold and silver miner that's mired in a liquidity crunch. AMC CEO Adam Aaron called it a bold diversification move, but one that made sense considering that highcroft like AMC, has rock solid assets. Pete it's a movie theater that was brought back from the brink of oblivion, and now they have enough money to diversify into mining companies.
44:10
Peter Dunn
I stand by my earliest comments about the entire meme stock flash. Has it made their stock price go up? Or are people skeptical by this moment?
44:18
Damian Dunn
You know what? That's a great choice. I did not do the research. I'll have to get the research department on that.
44:24
Peter Dunn
Wow. AMC. But you know what? Look, I mean, who are we to criticize people for diversifying from an industry where people couldn't actually spend money with you for two years?
44:38
Damian Dunn
Yeah, no, I'm sure this is perfectly good.
44:41
Peter Dunn
Every time we mention AMC stock, I instantly think of you going to watch top gun, too.
44:47
Damian Dunn
I'm just waiting for that day to arrive.
44:50
Peter Dunn
I love to celebrate others and I love to celebrate others joy that they have. I feel joy for your I want to see the movie myself a lot. But I feel so much joy for the joy that you will feel when you watch top gun two.
45:04
Damian Dunn
It is primed to be a huge letdown. And I already know that.
45:09
Peter Dunn
Rick swink notes that at 10:44 a.m.. Eastern standard time on march 18, AMC stock is trading at $15.39. Which means damn. That is not taking a big bump off of the gold and silver news.
45:24
Damian Dunn
No.
45:25
Peter Dunn
All right, what else?
45:27
Damian Dunn
If you make the federal minimum wage in the United States, you probably can't afford to live in any of its towns. According to the economic policy institute's updated family budget calculator, a full time worker with no children would need to make roughly $14.50 an hour to sustain themselves in the US. County with the lowest cost of living. Which is.
45:50
Peter Dunn
What? A missed opportunity.
45:52
Damian Dunn
Guess the state.
45:53
Peter Dunn
Okay, guess the state. Oh, now this feels rude. Okay, no. Lowest cost of living is all we're going with. My shirt is really bothering me. On camera right now. Mississippi.
46:08
Damian Dunn
Orangeburg County, South Carolina.
46:10
Peter Dunn
Really?
46:11
Damian Dunn
Yes. MIT's Living Wage Calculator, by the way, comes in at $13.88 for the same scenario.
46:18
Peter Dunn
What are the two numbers? 1388 and what?
46:20
Damian Dunn
1388 and 1450.
46:23
Peter Dunn
I like the MIT calculator is the one I go by, and I'm not joking. We actually look at that one quite a bit.
46:27
Damian Dunn
Yeah, that was one of the main reasons I picked this story, was because it got us to be able to plug the MIT calculator again.
46:33
Peter Dunn
LivingWage mit.edu. LivingWage mit.edu. You can see what you have to earn in the area you live to survive.
46:43
Damian Dunn
The Epis calculator looks at the cost of housing, food, childcare transportation, health care, and taxes in every county. It estimates for the annual income needed for a family of four, in most cases, not this one two adults and two children. And it ranges from nearly $60,000 in Orangeburg County, South Carolina, to more than well, we'll say San Mateo County, California. If it's $60,000 for a very minimum cost of living in Orangeburg County, South Carolina, in San Mateo County, California, it is $135,000 170.
47:21
Peter Dunn
Oh, that was pretty good guess.
47:22
Damian Dunn
That was a lot better than mine.
47:25
Peter Dunn
This is fascinating. So can I ask a question you're unlikely to know the answer to?
47:31
Damian Dunn
I can make anything up on the fly.
47:33
Peter Dunn
When was this study conducted and over what period of time is it suggesting the data is real?
47:39
Damian Dunn
I can't make that up because that would impeach myself.
47:41
Peter Dunn
Because if it's in the last six months or if it's beyond the last six months, this problem is actually much worse than what we've just described. Because of inflation.
47:52
Damian Dunn
Yeah. Even though the news story was just published this past week, that has no bearing on when the study was actually done.
48:00
Peter Dunn
Oh, man, that one hurts. It's so easy to gloss over a story like that when you see it or not even read it when you see the headline, because it just makes you sad. And it's not like us spending a lot of time on the story makes the pain that those people feel, especially when you say those people go away. But, man, that is tough because there are certain professions in which the math of the organization suggests that they pay this profession this for this role, and that also suggests that math doesn't work for the person themselves.
48:37
Damian Dunn
Correct.
48:38
Peter Dunn
That's tough to hear. You know what I mean? I mean, you and I live in this world, by the way. And by we live in this world we live in, trying to solve that problem doesn't make it any easier to hear those stories, though.
48:49
Damian Dunn
No family is doing their very best to try and get by. And sometimes it seems like the deck.
48:55
Peter Dunn
Is stacked against and here's the issue. I mean, there's a lot of issues, but here's the issues that I always think of with this. If you're a two earner household. If you're a two earner household, this gets a lot better. If you're a one earner household with other people in your household, it's really bad. And if you're an earner with only kids in your household and not another adult in the household, that could provide childcare, it's horrendous. It's catastrophic. And that is what is so scary about this, is that I will just put it out there. This calculator tells us the cost of being a single mom, is what it's saying, and how marginalized women with children are in our country. That's what this is about. The focus should rely there. And I hate to tell you this, but we have to end the show on that note this week.
49:58
Peter Dunn
But I want you to think about it because it's real. Hey, I'm sending you good vibes. Good vibes. Are all that's in the budget? I'm Pete the planner. Dame. Thanks for your help. This is the Pete the Planner show. God, we got to the more, you know, moment there ourselves. Yeah, it's true, though.
50:13
Damian Dunn
It's entirely true.
50:15
Peter Dunn
Look no further than that calculator to show you how marginalized women are in our country.
50:19
Damian Dunn
If you've never spent time on either the MIT calculator or apparently this other calculator that's available through Economic Policy Institute, it can be very eye opening. Just go kick around on it for a little while. It will be time well spent.
50:38
Peter Dunn
All right, Damon. That's it. Everybody else, thanks for spending time with us this week. I'm going to sit here and drink my Miguel and we'll see you next week. Dame we are on next week and then, I think the next week, but then we're off the next week.
50:53
Damian Dunn
That's way too much math for me to do.
50:55
Peter Dunn
Okay, two more weeks of show and then a week off.
50:58
Damian Dunn
Okay.
50:59
Peter Dunn
I'm on vacation, so I could do it from the beach, which could be fun, actually.
51:05
Damian Dunn
What if I go on vacation with you and we just do it together? Remote.
51:09
Peter Dunn
There will not be a show in three. Oh, all right. So dame. Goodbye. Everyone else, stay getting money.
