00:03
Peter Dunn
All right, so I'm on a date with my daughter. Actually, were going we grabbed sushi last night. Because I want to be the sort of parent that connects one one with my kid, teaches them manners at a restaurant, and that's where things go. Arise. We start this week's Pete the Planner show. Hello, Kristen.
00:26
Kristen Ahlenius
Hello, Pete.
00:28
Peter Dunn
Remote episode here today as I broadcast live from my porch. The thing is can I get obnoxious before I continue the story about eating sushi with my daughter?
00:42
Kristen Ahlenius
I would expect nothing less. Yeah.
00:44
Peter Dunn
Which also is obnoxious. It's on the side of our house, so technically it's a courtyard, but I didn't want to say broadcasting live from my courtyard. Do you know what I mean? Wow.
00:59
Kristen Ahlenius
Okay.
01:00
Peter Dunn
That's why I didn't say it. That's why I didn't want to bring it up.
01:03
Kristen Ahlenius
Okay, well, okay.
01:05
Peter Dunn
Dames on vacation. I believe he's on a Rocky Mountain high. Is that right? Is that where he is?
01:13
Kristen Ahlenius
Are those? The Rockies?
01:14
Peter Dunn
No. Maybe that's not where he is. Wait. It's Rockies, Colorado, right?
01:19
Kristen Ahlenius
I don't know. I don't know anything about geography.
01:22
Peter Dunn
Okay, so continuing the story, we're having sushi, and we're talking. We're having a good time. We're just chatting up, and a couple has sat next to us. Comes in. Age doesn't matter to me, right? Age is just a social construct. Yet these people have been on the Earth at least 30 to 40 years longer than me. I don't know. Doesn't matter. They're a couple. You can tell. They've spent some time together. My daughter and I give them a nice nod, and they whip out their phones, right? They whip out their phones, and they're just like, it looks like a middle school date. Both people are on their phones. They're not talking to each other. And I'm like, okay, cool. Maybe after that long of being in a relationship with someone, you don't have anything to say, right, Kristen? You know what I'm saying?
02:06
Kristen Ahlenius
Yeah. You're out of words.
02:07
Peter Dunn
So Ollie gives me this look. My daughter gives me this look. She says she's like, you thought I was bad with my phone? And I'm like, yeah. So then all of a sudden, at full volume and I'm not talking, like, 2004 phone volume full volume. I'm talking 2023 latest technology full volume. The woman is playing Candy Crush at full volume in this quiet, sushi restaurant, and it is intense. Then her companion, dare I say, her lover, he sorry, that's too much. Sorry. Too far. He begins audio on his phone, and he's on TikTok. He's on MAGA TikTok. MAGA TikTok. And he is knee deep in conspiracy theories as I'm trying to deal with some unagi on my chopsticks. And we got done with the meal, which became incredibly unenjoyable at that point because it was so loud. It was cacophonous. Cacophonous? Is that the word?
03:21
Kristen Ahlenius
I'm going it was a cacophony. There it is. Yeah.
03:24
Peter Dunn
Just competing. Candy Crush versus MAGA TikTok, and I'm just trying to talk to my 14 year old daughter, and we leave. And Ollie's like, I thought you were going to say something, and I'm really glad you didn't. And I'm like, I didn't want to, but I almost feel like I had you ever been in that situation?
03:44
Kristen Ahlenius
Yes. And is that better or worse than when someone to pilot Jeremy's comment? When someone does that on a plane.
03:53
Peter Dunn
That'S a good let's. Let's say we do have certainly people in our audience that are hearing impaired. And so the idea that you got to use speakerphone because it's a tool to communicate, totally get that. But I would assume that's the exception to the rule. I'm generally against sharing audio with the people. Yeah, Christine, you know, last week on the show, I played audio of what I listened to when I sleep, and it was like, vintage Oscillating fans, and I definitely got some feedback on that.
04:31
Kristen Ahlenius
I believe that because I listened to the podcast back while I was working out yesterday, and I was like, this is horrible. So I believe there was some feedback there.
04:44
Peter Dunn
So now as we've transitioned into the hotness is not a vibe, really, just the summer. My room is crazy hot. So I went downstairs in the basement and found a giant box fan, an old box fan, and I've now positioned it right off of my head, and it is blasting at full basey volume, blowing cool wind upon me. And so it's a whole new vibe when I'm sleeping at night.
05:10
Kristen Ahlenius
Why don't you turn down the don't.
05:14
Peter Dunn
Look, I don't know how any of this works. All right, Kristen, here's what's going to happen today. Since we are broadcasting live from my courtyard, at any point in time landscapers could I'm just kidding. At any point in time, there could be various delivery vehicles, garbage trucks, dogs barking. And so I just want to let everyone know that, okay, hopefully dogs barking. I do mean AKC champion dogs barking.
05:46
Kristen Ahlenius
You know my own word. If there's dogs barking, if my dogs happen to bark today, which, knock on wood, we'll just get to blame you. So this is perfect.
05:58
Peter Dunn
All right, so here's what we got. We got three segments plus bomb and news. Today first segment, we're going to talk about what a terrible week for people who have student loans, possibly one of the worst weeks ever. Second, we're going to answer a question via email about a housing situation gone awry from a tax perspective. And then finally, is it even possible to buy a home again for renters? Is that the set up on that?
06:25
Kristen Ahlenius
Yeah, sure. Yeah, that's good.
06:27
Peter Dunn
All right, that's what we're going to do. All right, let's do this. Oh, I forgot I got to set time. Oh, this is going to be a little harder because I don't have my studio. Oh, boy.
06:41
Kristen Ahlenius
Can you use the time on the live stream?
06:44
Peter Dunn
I could, but I have to document when it is okay. I'm good. Can you also keep an eye on it in case the old man gets forgetzy?
06:53
Kristen Ahlenius
Sure.
06:54
Peter Dunn
Okay, here we go. In three, two, one. This week on The Pete The Planet show, we answer your money questions. Here's how the show works. You email us, askpete@petetheplanner.com that's askpete@petetheplanner.com, and we will answer your questions on the air. By we, I mean kristen. Ahlenius, director of education at your money line. And I hello, Kristen.
07:16
Kristen Ahlenius
Hello, Pete.
07:18
Peter Dunn
Do you hear the ambient sound of our first remote episode of The Pete the Planner show in nearly 15 years? Yeah. No, I'm remote. You know those weekend shows, sometimes they're like the Home and garden show or the new opening of a T Mobile store. Well, I'm on my porch because it's nice outside. And so this is a remote. So you will hear ambient sounds. You will hear squirrels frolicking, you may hear poodles yipping. You may hear a garbage truck. I don't know, but that's how we're doing it here today. Kristen, how's your life?
07:52
Kristen Ahlenius
It's going well. Things are on the mend. My Internet is back, my dryer works. Just we're good, man.
08:01
Peter Dunn
Sounds like some home ownership nightmares, which we can touch on more in the second and third segment. However, first, just because you've had a good week doesn't mean people with student loans have had a good week. Kristen, I will go down and say I believe, as of yet, this past week was possibly the worst week ever for people with student loans, as two pretty definitive pieces of news came out. One, the Senate said, no, we're not going to do the student loan forgiveness thing. President Biden, now, there's talk that he is going to then reverse their thing. But again, bad news. Bad news for student loan borrowers. If you thought you have $10,000 of student loans forgiven, or 20,000 with Pilgrims, it's looking less and less likely. And that was a hotness in the fall. Do you remember, Kristen, when everyone was very excited about that?
08:51
Kristen Ahlenius
Oh, I do remember that. You and I did so many news spots and articles and just talking it to death about it finally happened. It finally happened. And it just feels like, one, as a student loan holder myself, it's defeating. And two, it also feels like, honestly, a little bit of wasted effort. We spent a lot of time covering that and helping people understand it, and it might have all been for nothing.
09:17
Peter Dunn
Yeah. And the other aspect of this is the debt ceiling. And you could argue that's related, I mean, if they're trying to cut spending in many respects, you could argue they're connected. But as part of the debt ceiling, student loan repayment is going to start, what, in about 60 days? As soon as that thing is signed?
09:36
Kristen Ahlenius
Yeah.
09:37
Peter Dunn
So August 30 or September 1, is that when the student loan bills go out and are due once again.
09:44
Kristen Ahlenius
Yeah. So it's 60 days after June 30, which I don't know how many days are in the months I don't know how to do the thing where you put your knuckles and count. So we'll call it September 1.
09:54
Peter Dunn
Fair enough. You know what's funny? You sort of half joked that you don't know how to count the months. I made a similar joke in a newspaper article once and I got the nastiest letter from a person. It was just joking, right? It was sort of like and the guy was like, I can't believe they let people write in newspapers that don't even know how to do those simple things. And it was like, it's a joke, Steve, calm down. Right. Anyway, so here's what this means. It means after some 40 months, people who've not been required to make a student loan payment are once again going to be required to make a student loan payment. Kristen, the other element of this that's slightly derivative is, wow, what if you graduated from school in 2020 and you've never made a student loan payment in your entire life, and you've set an entire lifestyle over the last three years?
10:49
Peter Dunn
That's going to be a nightmare. If you're 25 years old, you're in deep trouble come this fall.
10:57
Kristen Ahlenius
Yeah, I think that it's really difficult to learn how to integrate a payment. It's one thing to learn how to integrate your student loan payment right after you graduate because ideally you haven't established a lifestyle. But to your point, someone could be three years into a lifestyle that feels pretty comfortable and have an average student loan balance of like 30, some OD thousand dollars, and now they have to integrate a 300 and some dollars payment into their monthly budget. Even at a high income, it's still a monthly payment that you haven't been making for three years. It's hard to do a pilot.
11:32
Peter Dunn
Jeremy in our live Facebook chat, we broadcast live stream live this show Fridays at 10:00 a.m. Eastern on Facebook Live, YouTube Live and Twitter live pilot Jeremy says how's that recession looking? When people start taking money out of the economy to make these payments, not only is it going to create a lot of stress, but it's going to create a lack of spending. And as I often point out, the New York Times in April of 2020 said, one person's spending is another person's income. So, Kristen, are we going to see unemployment rise in October and November because money is getting pulled out of consumer spending?
12:12
Kristen Ahlenius
Maybe. But the reality of the other side of this is that technically your loan isn't going to go into default immediately. So if someone can't quite get their payments made or if they're having trouble integrating that payment, it's not like immediately something like, yeah, their credit report is going to be affected, but there aren't super severe immediate consequences. So I actually think it'll be delayed I think it could be like in the following year when people really are pushed between a rock and a hard place and they have to make that payment, that we might see the increased implications of that.
12:46
Peter Dunn
I got to think if we are touching your soul today because this is your reality, or you have a loved one who is going to be dealing with this, you got to come up with something right now. You've got like 60 days, 90 days to really come together with a plan. And for me, it's figure out what your payment is going to be like. Figure it out. That shouldn't be that hard. Then save that amount of money into your savings account this month and save that exact amount into your savings account next month and then make your payment, because if you do that, you're going to build up a little cushion there's, a little fail safe there, and then you'll be right on track paying it again. Is that a fair thing to do?
13:33
Kristen Ahlenius
Yeah, I think that's very fair, but I actually would back that all the way up and say, you have to know where you have to make your payment, because if you've never made a payment, you might have a zero relationship with your loan servicer. And even if you did have an established relationship with your loan servicer, the ODS that your loan transferred over the course of the last three years, I don't know what percentage of borrowers were transferred, but there was a lot of movement. You might not even know how to log in and get that information right now. So you have to do a little bit of that legwork if that's not something you've kept up with. If you got an email from your loan servicer and you thought, not a problem right now because I don't have a payment due, you might want to go back and look at your correspondence from them because they might not hold your loan anymore.
14:14
Peter Dunn
If you're just tuning into the Pete the Planner show here today, live on location from my porch. So if you're hearing ambient bird sounds, it's not something piped into the studio. It's Mother Nature herself making her voice heard. Kristen that's a really good point because if people discover that in August and then there's a rush to get online and to call, that's going to be a long wait. I'd jump in line right now. I mean, I'm not kidding. This first week of June, I'd get in there right now and start getting some answers.
14:46
Kristen Ahlenius
Yeah. Hold times are usually a little bit more lengthy in this space anyway, so the longer you wait, the more there's going to be that mad dash to your point. And the last thing that you need when you're already really stressed about something that you're not quite understanding, that you know is going to have a negative impact on your month to month, is to just sit there and listen to that hold music or to be transferred or just make the process easier on yourself and just kind of rip that Band Aid off now and give your servicer a call.
15:13
Peter Dunn
I hereby deputize every single listener to be obnoxious with everyone you know when it relates to student loans. Every cookout you go to, every graduation party you go to, every concert you avoid, every place you go, I want you to say, look, student loan payments are starting again. Save the first two months payments right now, then make your payment when it's due in the early fall and hold on tight because I think we're going to have another little micro recession because of this. I don't think it's going to be a big one, I don't think it's going to be a long one, but I think you can expect to see GDP busted up a little bit here as well. So here's what we're going to do. Coming back after the break, we have an email from someone who hit a tax bomb that happens from time to time and it's a big 125 thousand dollars mistake with a real estate transaction.
16:11
Peter Dunn
We'll talk about what we think, what we know, and so much more right here on the pizza Planner show. Live from my porch on location, I'm Pete the planner. Wasn't terrible.
16:25
Kristen Ahlenius
That was an excellent outro.
16:28
Peter Dunn
Felt pretty good.
16:29
Kristen Ahlenius
It was. It led into the next segment. It mentioned the birds again, it was very good.
16:35
Peter Dunn
Jeremy notes. Maybe the only light at the end of the tunnel will be we'll be correcting the out of control tipping expectations that we have somehow established. Sorry, I would give 28%, but I have student loans. That's caleb, my man, how are you? Good to see you. I want to connect with you. I want to chat about your new location. Also, hello to Ruth today, right? Krista?
17:01
Kristen Ahlenius
Yes, yes.
17:02
Peter Dunn
My grandmother, special friend of the show. Do you call it grandma Ruth? What's your grandma name for Ruth?
17:09
Kristen Ahlenius
I call all adults by their first name. Really? To her I would address her as grandma, but when we're talking, I don't say my grandma. All my friends know her as so.
17:21
Peter Dunn
That'S very adult of you. Do you call your doctor by his or her first name?
17:27
Kristen Ahlenius
I do not call her by her first name, but I've always called my mom by her first name and that really bothers some people. She's your mom, you should not call her that. And I'm like, well, her name's also.
17:37
Peter Dunn
So you had a lot of exposure to the military as well. Did you call people with a lot of stars and things on their shoulders? Did you call them by their first name?
17:46
Kristen Ahlenius
No, I didn't. Okay, just checking that's touche. Good call there.
17:54
Peter Dunn
Okay, so I had like a massive flashback when you started talking about you doing all those news hits in the fall. Okay. You need to stick with me for like 20 seconds before you call me creepy. And Ruth, this is not nearly as creepy as It sounds, okay? Just let it play out.
18:16
Kristen Ahlenius
Okay.
18:17
Peter Dunn
Last night I had a dream about you. Kristen.
18:22
Kristen Ahlenius
Go ahead.
18:24
Peter Dunn
It's worse than you thought?
18:25
Kristen Ahlenius
Yeah, a little bit.
18:26
Peter Dunn
We're starting worse than that. I'm serious. I really did. You won an Emmy for interviews you've done on TV. Oh, My. And everyone in Our company because we're in nice Place. Everyone's so excited for you. And you're like walking around at Reunion with the Emmy, but In A humble way. But you were excited. Yeah, I was so mad in my dream.
18:56
Kristen Ahlenius
Jealous.
18:58
Peter Dunn
Here's the thing. I have always wanted a local Emmy because I used to do so much local television news and I was part of those news departments and we did big pieces, like nine week running pieces. And I don't know if anyone knows how those things work. But you submit those pieces to the regional Emmys and you win them. And they're no offense, news, friends. They're not that hard to win. Okay. However, I don't have one. And I always thought, man, I would love an Emmy. And in my dream last night, you got an Emmy and It Was Like it was because of what you did with Al Jazeera on an Interview.
19:42
Kristen Ahlenius
Oh, that is a clawback.
19:44
Peter Dunn
I Know. And so everyone was so excited for you. Everyone was so excited for you. Yet Mr. Cheerleader Himself. I was so mad at you. And then I woke up this Morning and it felt a little bit Bet.
19:58
Kristen Ahlenius
Maybe we'll maybe we should unpack that one in like group therapy or something because there are some unresolved feelings There.
20:05
Peter Dunn
Apparently I used to really chase individual acclaim and notoriety and those sorts of things. Certainly a lot more than I do now, but I have some weird, deep seated resentment about what didn't happen. I thought I wanted to happen. That it's strange to get well. Carrie notes. Kristen is right. All right, I'm just close that now. No, okay. Kristen is right. A lot of recent graduates have no clue who their servicer even is. I'm a college financial aid coordinator. I've gotten five calls this morning from people who graduated in the past three years trying to figure out what they're going to do to need to pay. Oh, man. Carrie. Well, good luck. God Bless. Financial aid coordinators, right?
20:53
Kristen Ahlenius
No Kidding. And God bless Carrie. She's a big Purdue fan. We had a good week this week. Carrie?
20:59
Peter Dunn
Yes. We cause because the guy didn't go to the NBA.
21:02
Kristen Ahlenius
Correct? Yes, I know.
21:06
Peter Dunn
A guy didn't chase his dreams. That's good for the amateur athletics.
21:11
Kristen Ahlenius
He's going to. He Will.
21:15
Peter Dunn
I don't know. I don't pretend to know a lot about those things. Okay, let's continue with this. The Question. Can you read the question?
21:28
Kristen Ahlenius
I suppose.
21:28
Peter Dunn
Yeah, because it would help me out. I'm on location on a porch, and I don't have my array of monitors that I normally have.
21:36
Kristen Ahlenius
Okay, yeah, I can do that.
21:39
Peter Dunn
I can give a tour of my yard if you want, at some point.
21:42
Kristen Ahlenius
The Courtyard.
21:44
Peter Dunn
The courtyard. The Courtyard. I'm usually stay at, like, a Courtyard by Marriott, which I will be in one in Salt Lake City next week. But I'm the courtyard by Pete. Okay. No one cares. Three, two, one. Back on the Pete the Planner show on location this week. As you're driving around in your car or mulching your own yard, know that I'm in my yard? Yeah. I'm actually broadcasting from my yard today. Why? I don't know. Damien Dunn's on vacation. One of our co hosts. But fortunately, we've got another one of our illustrious co hosts. Kristen Alanius, director of Education at your moneyline. She knows everything about everything. Kristen, we got an email about someone who had a housing issue, but the housing issue is really a tax issue. Can you read it to us, please?
22:39
Kristen Ahlenius
I can read it to you, but full disclosure, someone is ringing my doorbell incessantly.
22:45
Peter Dunn
You go do that.
22:46
Kristen Ahlenius
Okay, thank you.
22:47
Peter Dunn
I'll deal with that. All right, so I will read the question. This is what happens on live radio. Doorbells ring and emergencies are either afoot or a very aggressive Girl Scout trying to sell DOSY Dows. Hello, all. I have a problem and would really appreciate some discussion from someone outside the situation. My wife and I recently moved again. You'll understand the again. Soon we will take advantage of the housing market and move into a house that better suited our needs. Money feels a little tight, but we're making it work. The problem, we didn't know if we sold our house, we would be hit with a tax bomb. We owe about $25,000 because we moved too quickly, and now I don't know how to come up with the tax money. We're thinking of taking an auto equity loan to cover the cost. That would make our car loan 80 months.
23:46
Peter Dunn
Help. Holy cow. Okay, so there is a lot there, and I am not going to pretend to be a CPA. I'm also not going to pretend to be a real estate expert. But I do know that you can find yourself in a jam if you do not time the repurchase of a home correctly. Kristen, I just read the email. What's the fundamental issue of why these people have a tax liability of $25,000?
24:13
Kristen Ahlenius
The fundamental issue is that selling real estate is technically a taxable event, but most of us don't think of it that way because we live in our houses long enough to exclude that gain. So if you live in your home, your primary residence, for more than two years, there's an ownership and use test. You get to exclude up to $500,000 of profit for a married couple. So most people don't really think of that.
24:40
Peter Dunn
So their timing was off. And we think they got bad advice, because if they're working with an accountant and their accountant said they should be fine, the accountant was wrong.
24:52
Kristen Ahlenius
The accountant was wrong. Or maybe the accountant didn't have all of the information. I don't want totally write them off. Maybe they didn't know the people moved. Maybe they didn't quite understand the timeline. There could be a lot of other factors at play here.
25:06
Peter Dunn
Okay, so you just bought a house. Theoretically, you've sunk a lot down payment money into it. You've got probably a small emergency fund. I'm not saying you're not financially sophisticated, but you did make a pretty weird real estate move, and so coming up with 25 grand is harder than you think. Kristen an auto equity loan? I know some stuff. I don't know if I've ever heard of an auto equity loan.
25:34
Kristen Ahlenius
I don't know if I've ever heard of it. And I think maybe it was phrasing that they were given to make it feel like it's not that big of a deal. They're basically refinancing a car that they already own. Whether it's already paid off, I don't know, but they're taking the money back out. They're almost like buying it and losing money in the process.
25:55
Peter Dunn
I really wish I knew more about the nuance of that. But I have to assume they're immediately underwater with the car, right?
26:05
Kristen Ahlenius
I would think so. And if they're not stretching it out for 80 months, I would think at some point they would be.
26:16
Peter Dunn
The other element of this that makes me nervous is let's say they total the car in a car accident. There's no way the replacement value of that car is going to cover I know. Sometimes there's what do we call it? Gap insurance or gap coverage. That would work. There's no way they have Gap coverage that has an additional $25,000.
26:34
Kristen Ahlenius
I mean, your auto equity loan should have a cap of your vehicle's actual blue book value or whatever value they're using. So I would think that gap would cover it. But again, if something happens, knock on wood. In that situation, they have no vehicle, and I don't know. I don't see a way that plays out, even with gap insurance that I like.
26:59
Peter Dunn
So what would you do if you're these people? You need $25,000 to pay the IRS. I assume you find your way to a payment plan, right? Find your way to a payment plan, cut your spending to make your payment. How long is the typical payment plan of the IRS? A couple of years.
27:17
Kristen Ahlenius
I want to say that you can stretch it for five, but I am not well enough first in that space.
27:24
Peter Dunn
If that's the case. I mean, you're talking about $400 a month payment. Far be it for me to be like, well, that's reasonable. I mean, it's reasonable to me, but maybe it's not reasonable to them. What are some other elements? How do you come up with $25,000?
27:39
Kristen Ahlenius
Well, something that I struggled with when I first saw this question was what really happened here was they took $25,000 in gain that they weren't actually entitled to and put it directly into the new house. So isn't it fundamentally it's the house's debt. It's so hard to say, hey, do a home equity loan. But really that should have been a mortgage payment anyway.
28:04
Peter Dunn
That's interesting. Right? So the slightly higher interest rates now they could take a home equity loan unless they don't have enough equity to take a home equity loan. I'm confused. Their actual gain had to be a lot more than $25,000.
28:25
Kristen Ahlenius
Their gain had to be like 125.
28:29
Peter Dunn
Yeah, they took that. Why would they not just take a home equity loan? I don't understand.
28:35
Kristen Ahlenius
Yeah, and maybe their debt to income ratio is not good enough. I don't know. And the IRS isn't going to look at that. They're going to put you on a payment plan as far as I know. And maybe there's a mix of options that works. Maybe they can't quite get a home equity loan for the whole thing. Maybe it looks like doing the home equity loan and the payment plan with the IRS. I don't know that there is a solution in this case because it's so much money that gets them. If they can't afford the payment plan, which I have a little more context in this situation, they feel that the payment plan is unaffordable. Then we have to come up with kind of like glue and tape and put it together the best way that we can. And maybe the answer is a combination.
29:17
Peter Dunn
What's the worst thing they could do?
29:20
Kristen Ahlenius
Oh my I don't know. What is the worst thing to do?
29:25
Peter Dunn
Well, I don't know. I feel like a lot of people would go to a 401K loan pretty quickly in this situation, which isn't something we love. But I'm just wondering aloud here, live on the radio, sitting on my porch, does that actually make sense?
29:46
Kristen Ahlenius
I don't love it, but I don't know how many other options they have. And the money is due. And again, maybe it's a combination of that too. Maybe it's a reasonable monthly payment. But the other thing too is you're going to have to pay that back in your 401. The money has to come out of your pocket somehow. So where does it come from at any point?
30:08
Peter Dunn
And again, this is one of those suggestions that I always levy with a soft hand, and that is to say at what point do you get a gig? At what point do you get a second job and chip away that way?
30:23
Kristen Ahlenius
Yeah, I know that this is hard and not always advice that people like to hear. We don't always get good feedback. But getting a gig might be the perfect solution because you know exactly how much the payment is going to be. You know. How long it's going to take to pay it off. You give that second job a job, you come into the gig like you said, the gig economy, and when it's done, then you walk away from all of it.
30:46
Peter Dunn
Yeah, I think maybe the big takeaway here is other than what that person needs to do is anytime if you're going to involve yourself in real estate, you do have to understand fundamental real estate laws and tax rules related to real estate. Apparently they ran this by their CPA that didn't work out. A financial planner may or may not know that either. That's why you got to know these things. All right, Kristen, let's do this. Let's take a break. Coming up after the break, new studies suggest more than 60% of renters think they'll never be able to afford a home. What are the ramifications for that? That's next right here on the Pete the Planner show. I'm Pete the planner. Was it an aggressive Girl Scout? Is everything okay?
31:28
Kristen Ahlenius
Everything's fine. I don't even want to say it's. A guy who mows for our HOA. He was giving me an invoice.
31:37
Peter Dunn
Wow.
31:38
Kristen Ahlenius
And my dogs were not happy. I didn't know what to thought, you know, once somebody doesn't come to the.
31:46
Peter Dunn
Door but I feel you. I mean, look, at any point during the show today, my whole vibe here could go off the rails. Like my 14 year old daughter, who is still asleep, could walk through that door in her pajamas not knowing that we're live on the air.
32:08
Kristen Ahlenius
She would resent you forever.
32:11
Peter Dunn
Oh, I hope she doesn't do it. I hope she's smart enough. But I don't have faith in that. So, Theodore, my eleven year old started playing the trombone this week, officially. I don't know if you've ever seen an eleven year old play a trombone.
32:28
Kristen Ahlenius
Yes, I was a bandy.
32:32
Peter Dunn
Oh, you were? So did you hang out with the trump bonus?
32:35
Kristen Ahlenius
No, not generally, no. Band is very clicky.
32:39
Peter Dunn
No, I played the drums. So that not a great instrument for a family to have to live with either. And I know they're learning. Like when my daughter started playing the violin, it was rough. And then at the end it was beautiful. It was really beautiful. But the trombone, how do we find beauty at some point with that thing?
32:58
Kristen Ahlenius
It's hard. It's a hard instrument to play. Who talked him into that? Was that his idea?
33:02
Peter Dunn
He wanted to do it. And I'll say this, I have booked a tremendous amount of business travel over the next three years.
33:11
Kristen Ahlenius
Good for you.
33:12
Peter Dunn
Yeah, I'm sorry. I've got to be in Fort Wayne all week. Stay at a red roof.
33:20
Kristen Ahlenius
That's a it's a hard instrument to learn for several reasons. So kudos to him for I don't know if he knew that he was taking on a challenge, but shout out builds character.
33:32
Peter Dunn
I'll be in Salt Lake City next week for most of the week. And here's the thing about Salt Lake City, it's at altitude. So I'm instantly going to feel terrible because I get altitude sickness very quickly.
33:41
Kristen Ahlenius
Oh, no.
33:42
Peter Dunn
Number two, it'll be a dry week for me because I'm at altitude, and if I have a beverage when I'm at altitude, it makes it even worse. So not that you need to have a drink to have a good time, but it's just a week of headaches is what I've got coming next week.
33:57
Kristen Ahlenius
Wonderful.
33:58
Peter Dunn
But at least I'll be with chat, so I don't know what that means.
34:02
Kristen Ahlenius
But, hey, it's good company.
34:06
Peter Dunn
All right, let's do this whole thing. So you're going to give us some context as we get going?
34:10
Kristen Ahlenius
Yeah.
34:11
Peter Dunn
You're not going to have some other landscaper ring the doorbell here.
34:17
Kristen Ahlenius
I was making fun of you. You were like, oh, the landscapers could come by. And then yep. Okay.
34:22
Peter Dunn
Pete, I have a dear friend who's from London, and she was delighted when I told her the story about the bobby and the bus driver.
34:27
Kristen Ahlenius
That's incredible.
34:29
Peter Dunn
That was a great I love that. Oh, they limit ABV in Utah. Didn't know that. Jeremy. Thank you.
34:37
Kristen Ahlenius
The chat is hopping today.
34:40
Peter Dunn
I think people like the porch vibe.
34:42
Kristen Ahlenius
I think they do. Or it's because Damien's gone. We'll leave that up to viewer.
34:48
Peter Dunn
On. I sit in this chair on this porch. Usually chair angled a little different way a lot this time of year. I'll come out here after a run in the morning and drink coffee or whatever and do email at night. I sit out here. I'm out here all the time. And so I'm glad to welcome you into the space in my heart. I don't know what the hell. Yeah, that wasn't weird for you?
35:11
Kristen Ahlenius
It was a little weird, but I was also getting called out for being.
35:14
Peter Dunn
Mean to oh, we'll take more of that. We'll take more of that. Okay, here we go. In three, two, one. Back on the Pete the planner show. Kristen, you recently read an article that suggests a tremendous number of renters look at the prospects of being a homeowner someday and they say, no, can't do that. Help us understand a little bit more context from what you have read.
35:43
Kristen Ahlenius
You actually pretty much summarized it. 66% of renters say homeownership is hopeless. So there's two different questions that they ask then how would you rather spend your money if you're not going to own a home? And why do you feel like homeownership is hopeless? Which one do you want to start with?
36:02
Peter Dunn
Yeah, that's interesting. I'm not sure I kind of want to add a third to it as well, is what's the best part of owning a home? You know what I mean? Because you're trying to oh. We may have our first loud sound.
36:13
Kristen Ahlenius
Excellent.
36:14
Peter Dunn
Hear it?
36:15
Kristen Ahlenius
I cannot.
36:16
Peter Dunn
We are broadcasting remote from my porch today. So we are getting ambient sounds. I don't know what's about to happen, but this could get awkward. Kristen, why don't you go ahead and take it, and maybe I'll mute for a second.
36:28
Kristen Ahlenius
That's fine. So 66% of renters say homeownership is hopeless and they would rather spend their money. They got to answer a couple of different they could pick more than one choice. So 71% said they would rather be debt free. 66% said they would rather have a comfortable retirement, and 59% said they would rather own a car.
36:50
Peter Dunn
So those are things oh, Lord, this is all over the place.
36:55
Kristen Ahlenius
All over.
36:56
Peter Dunn
Okay, let's start with the first one. They'd rather not have debt being debt free. Is this a byproduct of the debt free movement? What is this?
37:07
Kristen Ahlenius
I don't know. But if you're debt free outside of your mortgage payment, to me that's as good as being debt free. Maybe that's a naive take, but you can have a mortgage and have no other types of debt and you're still building equity, which I hate to say that, because that buys into the idea that you have to own a home, but I don't know.
37:31
Peter Dunn
Yeah, okay, so the first one doesn't pass the sniff test. For me, it might be a personal preference thing, but just like the math doesn't work. The second one is they want to focus on retirement.
37:42
Kristen Ahlenius
Yes.
37:44
Peter Dunn
Okay. That's actually, to me, the number one reason to own a home. Yeah, because you eventually won't have a payment for where you live in retirement. It makes retirement easier. That's why I'm a homeowner.
37:59
Kristen Ahlenius
Yeah, I agree with that. And then the article that we talked about last week about the percent of Americans who feel like they're on track to retire doesn't make me feel great about this. And to your point, the goal is to be mortgage free when you retire, because for most of us, that is our largest expense month to month. So having to plan for that in perpetuity just makes retirement funding that much harder.
38:25
Peter Dunn
And what was the third reason?
38:27
Kristen Ahlenius
Owning a car. I'm not trying to laugh. I'm sorry.
38:33
Peter Dunn
Is it so you do an auto equity loan on the car? Is that the no, we're shaming now. Let's not do that. Okay, well, you know what? I don't think that's actually the worst answer. I think it's not my preference, but depending on where you live, if transportation leaving where you live is more important than how you live, I don't actually know if I have a fundamental problem with that answer. It might be the best of the.
39:00
Kristen Ahlenius
Three answers, given the choices. Perhaps. Okay, so then let's talk about the why. Why do you feel that homeownership is hopeless? So again, you could pick more than one, and most people picked the same. 378 percent said they can't afford a home.
39:18
Peter Dunn
Okay, totally.
39:19
Kristen Ahlenius
72% said they can't afford the down payment on a home.
39:23
Peter Dunn
Totally.
39:24
Kristen Ahlenius
And 71% said the high interest rates.
39:31
Peter Dunn
Okay.
39:36
Kristen Ahlenius
The third one is just a byproduct of the first two?
39:40
Peter Dunn
I think so. And I would also say that the third one is going to clear itself up and isn't the thing that people would it's hopeless to ever buy a home. Do people not know that interest rates change?
39:53
Kristen Ahlenius
Yeah, but maybe recency bias is at play here. It might be really hard even to talk about what is. I mean, technically we're still in a considerably low interest rate environment, but when you're coming off of what's the rate on your mortgage? Like something disgusting. Yeah. When you hear other people say that they locked in at two and a half and now you're thinking about signing for six or seven, that recency bias, I think, is definitely a factor.
40:20
Peter Dunn
Yeah. Seriously. The primary reason I love being a homeowner, and maybe the only reason I love being a homeowner is because I will eventually own it. And I think that is slightly absent in today's homeowner, is the idea that when you buy a home, the goal is to actually own it, not to just make payments and live there. And that's why I think when people just constantly were refinancing 30 year mortgages and paying them as 30 year mortgages, it gets pretty rough.
40:49
Kristen Ahlenius
Yeah, I agree with that. And then there were a few other statistics in the article. So nearly one in four renters say that they currently spend 50% or more of their income on rent. So obviously, saving for a down payment is really hard if you're spending 50% or more of your income on rent, and then one third actually say they just aren't interested in buying a home.
41:14
Peter Dunn
What is your favorite part of being a homeowner?
41:17
Kristen Ahlenius
Kristen I have very few favorite parts. I think my favorite part is that I can decorate it and paint it the way that I want and I don't have to worry, and that if something's wrong, I can choose to fix it at a pace that I want. I don't have to call a landlord, but I don't love being a homeowner by any stretch.
41:37
Peter Dunn
If you're just joining us on the show, I am doing one of the other good parts of being a homeowner is I'm sitting on my porch broadcasting live via remote on today's Pete the Planner show. No matter where you're listening well, I'm talking through a microphone outside and you will hear ambient sounds, including birds, a construction worker across the street that's working on a waterline now, so that's fortuitous timing. And kids riding down the bicycles with helmets and knee pads because we're a very safe neighborhood. Kristen I think this is an interesting study. I think it is a byproduct of the times we live in. And I mean that with the recency bias of the last 40 months or so, I feel like this is a very 2020 to 2023 study. And with student loans being a nightmare right now and housing prices increasing and interest rates being high, I'm not actually surprised by this number.
42:40
Peter Dunn
And I think it could actually get worse before it gets better. Not to mention something that we very rarely talk about on the show is all the private equity money and outside money going in to buy residential properties and then renting them back, thus driving prices up. I believe that to be a very real problem that affects a lot of communities.
43:01
Kristen Ahlenius
Yeah, I do too. And you're right. We don't talk about it that much. And speaking of that, I don't think that for a little while, we've talked about the median home price. Do you know what it is? As of April of 2020.
43:11
Peter Dunn
Okay. So the median home price in the United States. Okay.
43:15
Kristen Ahlenius
April of 2023.
43:17
Peter Dunn
April of 2023. This is where I instantly seem out of touch. What's worse, this or not knowing? A gallon of milk, I would say.
43:31
Kristen Ahlenius
I'm nervous. You're off by 100,000. It's 476.
43:41
Peter Dunn
Whoa.
43:43
Kristen Ahlenius
Up 33% since January of 2020.
43:48
Peter Dunn
Whoa.
43:50
Kristen Ahlenius
Yes.
43:51
Peter Dunn
That's a lot of money.
43:53
Kristen Ahlenius
It's so much. And then I think about that in relation to median income, and I think about my income related to my mortgage payment, related to the median income, and I'm just like I can't fathom when I work out those ratios. The median home price of the median income. I can't even wrap my mind around it.
44:12
Peter Dunn
This harkens back to a conversation a few weeks ago, a couple of months ago, maybe, on the show, about dual income households. And based on those prices, you almost have to have a dual income household.
44:24
Kristen Ahlenius
Yes. Or rent out a room or something. Being a single income and owning a home, I think, just gets harder all the time.
44:32
Peter Dunn
All right, let's do this. Let's take a break. Let me go and kick all the squirrels out of my yard. It's getting a little loud. If you just joined us, I'm remote today from my porch. I don't know why. In fact, I probably will get in trouble by my radio partners, but this is what we're doing. I made an executive decision that I'm not authorized to make coming back. Biggest waste of money of the week. And the news. Kristen compiled the news this week because Damien is on vacation. So let's see what she comes up with right after she has a terrible guest of. I'm pete the planer. This is the Pete the planner show. I don't know. Could you hear a bunch of stuff.
45:09
Kristen Ahlenius
That I was I could tell you were muting, so I was a little nervous because I didn't know how long I needed to talk, if there was, like, something you for real? For real. Needed muted, or if you were just trying to help. Okay, that's nice.
45:24
Peter Dunn
You guys want a little bit more luck of what's going on here?
45:26
Kristen Ahlenius
Yeah. Let's see the courtyard. Oh, so fancy. Some of us don't have courtyards. I'm like, leaning like you're going to turn the camera.
45:37
Peter Dunn
All right. For those listening on the podcast, I just did a visual thing Danza suggests. Yes. That's why it's impossible for a single agent in California making 65K can't buy a house. I feel you. And again, hopefully, we never portray that homeownership is for everyone or homeownership is the goal. I don't feel that way at all. And I think if my life was different and maybe when our kids are out of the house, it's different. I don't know. I thought about this recently. Let's say you paid off your mortgage. You're not really geographically anchored anymore because your kids are out of the house. Why not sell the house and go rent in places for a little bit and just realize that cash and not have a tax bomb?
46:33
Kristen Ahlenius
That's tough.
46:35
Peter Dunn
All right. You ready for bomba news?
46:38
Kristen Ahlenius
Yes. I have three news articles just so that okay.
46:42
Peter Dunn
So you're saying can you hear that plane?
46:47
Kristen Ahlenius
What is that?
46:48
Peter Dunn
It's a plane.
46:49
Kristen Ahlenius
Oh. It almost sounded like it's.
46:51
Peter Dunn
Pilot jeremy.
46:53
Kristen Ahlenius
Jeremy. Jeremy. Oh, my.
46:58
Peter Dunn
What? I will say so we are in line with the Indianapolis Motor Speedway, and so that means on race day and then the days leading up, the flyovers fly right over our house. And it is loud. It is incredibly loud. And it's very cool and happens every year. It's a tradition.
47:25
Kristen Ahlenius
When I lived in Arizona, I lived literally, like, at the airport, basically. And then when I moved, I lived over the flight path and it was like dishes would regularly Ratle in the cupboards. It's very loud.
47:42
Peter Dunn
Pilot Jeremy said he was waving going over top there. Okay, let's start this segment. I'm going to have to do some trickery here because I don't have all my monitors and whatnot. Okay. So here we go. In three, two, one. This week's biggest waste of money of the week, right here on the Pizza Planner show is Le Epe 1839 by Alex Moss. Grenade clock.
48:15
Kristen Ahlenius
What is this?
48:17
Peter Dunn
The Bespoke Horologist collaborates with jeweler Alex Moss on the Le Epe, 1839 by Alex Moss. Grenade. Clock. The intricate timepiece takes the form of an MK two grenade covered in rare diamonds. Black aluminum discs display the hours and minutes while the in house movement ticks at 18,000 vibrations per hour. Same. And the balance wheel is featured in front. The kinetic sculpture is designed to remind us that time is fleeting. Timeout. Do I have any timeouts remaining?
48:54
Kristen Ahlenius
Yeah. You haven't used any?
48:55
Peter Dunn
I don't think that is the grossest piece of copy I think I've ever read.
49:01
Kristen Ahlenius
That's so harsh.
49:02
Peter Dunn
The kinetic sculpture is designed to remind us that time is fleeting. The hell is wrong with those people? Why would you say that?
49:12
Kristen Ahlenius
To scare you into buying one.
49:14
Peter Dunn
I mean, a grenade reminds you that time is fleeting. I don't okay. Time in a pin, double as a key. And once pulled, the time can be set and the 8th day movement can be wound. Okay, so to pull the pin on the grenade is how you wind the clock.
49:38
Kristen Ahlenius
I don't care for that.
49:40
Peter Dunn
I'm uncomfortable. I'm not anti gun or anything like that per se, but this seems a bit on the nose.
49:46
Kristen Ahlenius
It's a bit aggressive, I feel. Sorry.
49:50
Peter Dunn
Pilot jeremy, there is a giant wolf spider on the chair next to me outside. I'm broadcasting outside today. Oh my gosh. It's going to kill me. Kristen, how much would a person need to pay to buy a diamond encrusted hand grenade clock? What the heck?
50:12
Kristen Ahlenius
I feel like the diamonds alone could be tens of thousands.
50:14
Peter Dunn
So I'm going to say 75, 149,000 Americans halfway there. Oh my gosh. Okay, Kristen, what's in the news this week?
50:30
Kristen Ahlenius
Young adults are taking longer to reach, quote, key life milestones, end quote, impacting finances. Later analysis shows in 2021, adults who were 21 were less likely to have a full time job, be financially independent, live on their own, or be married or have children than their predecessors from 1980. So for those of you playing at home, financial independence is defined as having a single income of at least 150% of the poverty level, which in 2021, you would have needed to have made $19,320.
51:09
Peter Dunn
So this is interesting. Contextually interesting and it tracks. I do feel like people are really delaying life's major milestones or they're redefining what it is to have those milestones, right?
51:22
Kristen Ahlenius
Yeah, I think it's redefinition. And then in that same article, they said that nearly half of 21 year olds are in college now, compared to 31% in 1980. So when you're talking you're 21, you've probably pursued at least a four year degree. If we're talking about half of young adults are pursuing a four year degree, of course they're launching their life at least four years later than their 18 year old 1980 counterparts. Right.
51:48
Peter Dunn
Can I make a boomer comment here? As the resident boomer? I'm not a boomer, I don't know what I am. But I would also say, and I think this is a good thing, but it's also very different. When I was in my twenty s oh my so I was in my 20s in the early 2000s, so I was 22 in the year 2000. So you do the math yourself. People my age and at my lot in life, they didn't just get up and go to Spain or they didn't get up and go on massive trips. Look at our coworkers where they've been our 20 somethings here recently. I think it's great. I think people are saying, look, I'm not going to go buy a house. I'm going to travel and see the world and enjoy my life. And I think that is fundamentally different at 22.
52:36
Peter Dunn
Kristen I was married and owned a home, so I was anchored down in more ways than one. At age 22, I wasn't out seeing the world like so many people do today.
52:49
Kristen Ahlenius
Yeah, I think that's fair. And then the final statistic from that article that I thought was interesting said that in 2021, 39% of 21 year olds were working full time, but in 1980, this was nearly two thirds. So there's almost a direct replacement from full time work to college. So I don't think it's that alarming. But the headline definitely scared me, that's for sure.
53:14
Peter Dunn
Yeah, the headline almost beckons this idea that there's something wrong with this, right? There's nothing wrong with this. It's a reprioritization. In some ways a good way. I don't think there's any slacking. I don't think there's any finding myself. I just think it's a reprioritization of what it is to get in the rat race and all those other things. So interesting. What else is in the news?
53:38
Kristen Ahlenius
The Eagles among the NFL teams with the most dead money. This is for our coworker, Lisa. If you're like me and you didn't know I knew once I read it what dead money was. I didn't know that they called it this. So dead money is money guaranteed to players who've actually left the team. So the biggest source of dead money for the Eagles is actually from Fletcher Cox, a defensive tackle who's still on the team. He was released last year and then later resigned, but he's still entitled to an extra 15 million from that. And if we want to play a little guessing game, I have the other top four teams. Like, who has the most dead money in the NFL?
54:16
Peter Dunn
Okay, when was this published?
54:20
Kristen Ahlenius
I just read the article this week.
54:23
Peter Dunn
Then I got to say the Cardinals are there because they just cut. DeAndre Hopkins is in there in the top three. No, I'm going to go with the Buccaneers because of Tom Brady's retirement.
54:35
Kristen Ahlenius
Yeah, they're number 175 million in dead money.
54:41
Peter Dunn
And I'm going to go with Aaron. The Green Bay Packers as well.
54:45
Kristen Ahlenius
The Green Bay Packers are number 357 million. And then right in the middle, the La. Rams, they're making a run for that number one spot. Just over 74 million in dead money.
54:56
Peter Dunn
I like that. We have a little sports report here on this show. Whether we don't talk enough sports on.
55:01
Kristen Ahlenius
Our here financial show, I do agree with that. And when I saw this article, I was like, okay, I have got to figure out a way to put this in the show this week and shout.
55:10
Peter Dunn
Out I know it's a week early, Kristen, but who do you have in the Champions League final next Saturday? Who's pulling this even?
55:19
Kristen Ahlenius
Is that soccer?
55:20
Peter Dunn
It is soccer.
55:23
Kristen Ahlenius
I don't even know any soccer teams.
55:25
Peter Dunn
Oh, God. It's about to get very loud here on our remote location as another construction crew has shown up and they're staring at me. So this is good. How you doing? He's looking at me like I'm doing something weird. I'm sure I have a full broadcasting set up on a courtyard in Carmel.
55:41
Kristen Ahlenius
Huge microphone.
55:43
Peter Dunn
I mean, sure, I'm the weirdo. Anyway, it's Man City versus Real Madrid, and the hope is that maybe Man City can pull it off again this year. Kristen, what else is in the news? As we begin to wrap up the.
55:58
Kristen Ahlenius
Show, probably your favorite news story, apple customers struggle to get money out of their Goldman Sachs account. The Wall Street Journal interviewed this guy who tried to get money from his Apple account on May 15, and the money actually didn't hit his account until this previous Thursday, which was like May 30 or 31st maybe. And it only happened because The Wall Street Journal called for comments from them. And apparently he is not the only one who's been having trouble getting money in and out of the account, mostly out of the account, which means that maybe Apple Bank wasn't quite ready for launch.
56:36
Peter Dunn
Didn't other coworkers within this show complex open an Apple savings account?
56:43
Kristen Ahlenius
They did, but I don't know if any of them were part of the billion dollars that was deposited in the first four days.
56:51
Peter Dunn
I'm telling you, when a tech company who is not a bank says they're a bank, you're going to have problems. You just are. This is not surprising. It is my favorite story because it proves me right. But it is also my least favorite story because people are financially wounded by that. That's the trade off of having really high interest rates, is that maybe there's not the infrastructure to support withdrawals. And so that is certainly frustrating, I hope. If you are listening right now and you have made a deposit into a high yield savings account of some sort that is unorthodox, to say the least, be smart about when you need to make a withdrawal. Withdraw it a little bit sooner than you think, so you have the money and time to deal with your life. That's all the time we have for this week's show.
57:35
Peter Dunn
So I'm sending you good vibes because good vibes are all that's in the budget. I'm Pete the planner. This is the Pete the Planner show. How loud is it right now? It's not, man. I mean, I got a dirty look from someone who's like, why am I getting a dirty I am a homeowner.
57:58
Kristen Ahlenius
I am a homeowner on my own courtyard.
58:03
Peter Dunn
Let's see what's going on here. I'm turning the oh, my yeah. Oh, there's my daughter. Yes. Come on the show. There she is. That would have been a nightmare for everyone involved. 11:00 A.m. On the radio right now. Yes. Get your life together, girl. Okay, sorry. That was great. Okay, I'm going to go. I got things to do. Sorry. Jeremiah dame's back next week. Kristen I will be back from Salt Lake, and so I will be well salted ready to go.
58:49
Kristen Ahlenius
I don't think I'm going to be here next week.
58:52
Peter Dunn
Jeez this week? That bad. That you're just like I'm done or what?
58:56
Kristen Ahlenius
I'm out. No, I think I switched it for a different Friday. Dame's not here. So I haven't officially been like, hey, bubble bee bumblebee, I did that will be clipped for instagram. It's not going to sting you.
59:13
Peter Dunn
I don't know. I don't know him. And where he's from?
59:16
Kristen Ahlenius
I don't know him.
59:19
Peter Dunn
You're repping the wrong set. That was like a gang culture reference. Look at him. Oh, my gosh. He's the size of a Volkswagen Bug. What?
59:28
Kristen Ahlenius
This is like the I got to go. Okay, bye.
59:31
Peter Dunn
My life is in danger. Stay getting money. Stay getting honey.
