The Pete the Planner® Show

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Ep. 161: John has nearly thought of everything…but he hasn’t Jun 06, 2017

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Meet John. John’s main concerns, in his own words: My wife and I just welcomed our second (and last!) child. We have a comfortable lifestyle – both have stable jobs, we purchased a new home back in 2015, and save a respectable amount each month. However, the ‘unknown’ for us is if we are saving enough for our own future and our children’s. We have just under $18K in savings across our combines savings accounts, which we contribute a little of $1K to each month. $11K of that is an untouched Emergency Fund where most of our monthly savings contributions go. Now on to the debt… We currently owe $304K on a 30yr mortgage. We purchased a new home in 2015, valued somewhere in the neighborhood of $360K. I have a car under 5yrs old which we are aggressively paying off so that we eliminate that debt by the end of 2017. My wife also has a car that is currently leased and has student loan debt which we are going to tackle more aggressively once my car is paid off at the end of the year. Once my car and student loan debt are paid off, we intend to aggressively contribute to paying down more principle on our mortgage since we want this home to be our last. So I guess my questions are: Do we tackle our debt (outside of mortgage) more aggressively first since we have a decent head start on an Emergency Fund? Or, do we move those extra debt payments into retirement contributions to our 401Ks or Roth IRA? In the next few years, we would love to be debt free outside of our mortgage, and be able to cut my wife’s hours back to only two shifts a week instead of three (she is a nurse), or have her stay home completely.

Ep. 160: Serena is struggling to prioritize May 23, 2017

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Meet Serena. Serena’s main concerns, in her own words: I’m starting a new job, so I feel like I’ll finally be earning enough to open an individual retirement account (in addition to my employer’s pension plan); however; I still have a lot of student loan debt. With these competing priorities, I’m worried about how my husband and I are going to save enough money to buy a house in a few years.

Ep. 158: Dylan is a cop with big goals May 18, 2017

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Meet Dylan. Dylan’s main concerns, in his own words: We are both in law enforcement and live together with two children under three years of age. She was out of work for a year and a half with child care and we have 26K in credit card debt and a 178K mortgage and about 15K in medical bills. My power percentage is 32. We have almost identical incomes at 71K each and she puts in 15% (75k current total) and I put in 12% (200k current total) into separate 457b (Deferred Compensation). We have pensions through work. I am 48 and will retire at 59 1/2 with a full pension. She is 34 and will retire at 53 with a full pension after 25yrs of service. We can’t seem to save any extra money for a down payment on a new home. I am very worried we don’t have enough saved for a comfortable retirement and provide for the children.

Ep. 157: Financial Stability May 11, 2017

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This week, I cover the top three signs of financial stability. Over the course of my career, I’ve seen thousands of different financial situations—good and bad. These three signs have consistently been apparent in the good ones. * At least three months’ of expenses saved. An emergency fund. Seems simple enough right? From my experience, it can sometimes take people years to keep that amount in a savings account. You really need to go out of your way to make sure this is a lump sum completely separate from the cash account you use for everyday purchases. Start by just saving one month of expenses first. Work your way up to three as soon as you can. * At least a 20% Power Percentage™. Don’t know your Power Percentage™? Read more about it here or listen to my podcast about it. The quickest and easiest way to bump up your percentage is to increase your retirement contributions. * A clear understanding of your #1 financial goal. In other words, for the next extra dollar that comes into your household, do you have a plan for exactly where it will go? No matter what is happening in your life, keep at least one goal for your finances. Don’t let yourself become stagnant. If you’ve just hit a rough patch, your first goal is to rebuild your emergency fund. If you just paid off a large debt, have a plan for where the extra money will be going now that it’s not going to a monthly payment. I get it, bad stuff will happen, but you cannot let instability set in. Ready to create stability in your life? Make the decision to take these steps today.

Ep. 156: Aurora is already a millionaire…now what? May 09, 2017

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M$D: Done. Meet Aurora. Aurora’s main concerns, in her own words: We are a dual income, one child family, who already has a million dollars saved for retirement. Our emergency fund is only at $26K and we don’t really budget our income (almost $250K). Should we reduce down our future savings to boost our lifestyle now or work to really budget our money better?? In fairness, we take two nice vacations each year but still feel strapped for cash monthly. Our power percentage is 34% but we’d like to make it higher. Do you have any thoughts on where to go from here?? We have wills and our son (7) has $85K set aside for college.

Ep. 155: Healthcare May 04, 2017

Show notes

If you’re like most people, you haven’t been able to avoid all the discussion surrounding healthcare in the past few weeks and months. To cut through all the static, I brought on Paul Ashley from First Person Benefit Advisors onto my show to ask the most pressing questions. Since the Affordable Healthcare Act was passed in 2010, Republicans have wanted to repeal and replace it. But what does that mean? What does it look like in our every day life? We talk about the real differences between Obamacare (the ACA) and Trumpcare (the AHCA). No matter where you stand on the political scale, healthcare affects every one of us and it’s important to know what each side believes as well as the reality of each bill in the midst of so much opinionated coverage. If you’ve ever wondered, “Why does healthcare cost so much?” or “How are other countries able to have what looks like ‘free’ healthcare?” then this episode is for you. Follow Paul Ashley on Twitter or check out First Person Advisors here.

Ep. 153: The Turn Around Apr 20, 2017

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I’m dedicating this entire episode to Barb! Barb, a wonderful audience member from a speech I gave last week in Michigan, asked the best question I’ve heard in years. What do you do when, 10 to 15 years from retiring, you realize your Power Percentage isn’t where it should be and you aren’t sure if you can turn the ship around? Whoa. Am I excited to tackle this one. This episode is the turn around episode and we take on more Power Percentage challenges. To answer Barb’s question, I start with diagnosing the problem. How can you truly know you’re struggling? In what area are you struggling? Power Percentage answers this. More often than not, it’s a lifestyle problem. It always boils down to poor financial behavior. You’re either spending too much, in too much debt, or not saving enough. The hard truth is, no matter what caused it, the financial struggle is oftentimes due to your behavior. I know, I know, we all have different situations and circumstances, but if you’re looking at retirement and you aren’t fully prepared, saying, “It’s not my fault” is the same thing as saying, “I can’t fix it.” Look in the mirror and stop lying to yourself. You’re either on a path to retirement or you’re not. There is no “kinda”. That being said, how can you truly fix this? To answer this, I look at a couple case studies. Overall, I break it down in a few steps: * Figure out exactly how much they need to pay per month to make sure their mortgage is completely paid off by retirement. * Immediately crank up your Power Percentage by increasing your retirement contributions. No excuses. At this point, you’re probably asking, “Where is the money for this supposed to come from?” And this is where I get real with you. The reason you’re in a tough spot is because you’ve let other priorities move ahead of retirement. So should you live a rough life just to retire successfully? The answer is YES. We are talking about putting away enough money to survive without your income. If this sounds terrifying, it’s because it is. * Never absorb a pay raise again. Put your raise directly toward your retirement fund. * After these steps, it comes down to slimming down your lifestyle (i.e. cutting vacations, dining out less, downsizing your home, etc.) Feeling a reality check coming on? Watch the episode on PTPTV and share with someone else who needs a reality check.

Ep. 152: Kendall has a child with special needs and wants to plan for the future Apr 18, 2017

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M$D: April 29, 2047 Meet Kendall. Kendall’s main concerns, in her words: We have a daughter with autism that we’re anticipating needing to care for the rest of our lives. Waiting for the state to set up ABLE account for her. Want to make sure we’re doing everything else right. I stopped working because of all the therapies. Contemplating going back to work part time in a lower paying field with flexibility but in the back of my mind thinking I may need to homeschool as she gets older. But, not working has me worried about SS, medicare, and disability benefits for myself. I do a small work from home gig as an independent contractor, but it doesn’t pay much. We’re working on paying our mortgage off in 15 years. Still have student loan debts. His will be gone this year where mine still have awhile. Also, my husband started working for a company last year that offers a pension, 50% vested in 5 years, 100% in 10. Full benefits at 65 or age plus years worked = 85. So far, we have no information about how much of a pension he could be potentially getting so trying to figure out how to plan for retirement with that. Plus, making sure we’ll be OK for my husband to buy a Tesla model 3 when it comes out.

Ep. 151: Mailbag Apr 13, 2017

Show notes

This week, I dig into more of your questions. These are the ones I tackle: “Hello Pete, I’m a 23-year-old and I work as a chemist making $50,000 a year. I’m currently contributing 6% to my employer-sponsored Roth 401(k) and maxing out my Roth IRA. I also recently started investing in a taxable account with my tax return and end-of-the-year bonus money. I have $26,000 in student loan debt and $10,000 in a car loan. The interest rates are 5.2% and 2.45% respectively. I currently make the minimum payments on each but feel overwhelmed by the large amount of debt. Should I keep throwing my extra money in the taxable account or start to double down on those loans? My investments have been making more than I currently pay in interest which is why I feel I am at a crossroads.” — Alex from Wisconsin “Is a 35% power percentage really realistic? I’m a single 27-year-old, drive a paid-off car, invest 12% toward retirement (includes employer contributions, retirement is between a Roth and a traditional), invest 8% gross toward emergency savings, 4.33% gross toward a taxable brokerage account, and to show for all of it, my net worth is in the low 40’s. The only debt I have is a small chunk of credit card debt. The problem I had was that after computing my power percentage, I have a less than satisfactory percentage at 25%. Am I missing something?” — Cory from Colorado “Hey Pete, I’ve been a big fan for a long time, my dad was too. I have to say, he probably followed more of your advice than me. One thing he did follow was your advice for freezing my parents’ credit. It sounds great, but now that he’s passed, my mom can’t get anything in her name because she doesn’t know the answers to the security questions they’re asking. Anyway, this on top of all the stress of losing her husband is an enormous pain. What do you think? A great blog post in the making or weeks of time on the phone in frustration or both?” —Allison I also cover manure, silent killers, and my best tactics for faking your way through English class. What can I say? Sometimes I get off track.

Ep. 150: Renee has a new baby and some extra money at the end of the month…can she avoid lifestyle creep? Apr 11, 2017

Show notes

M$D: January 22, 2039 Meet Renee. Renee’s main concerns, in her words: I feel like we have all of the pieces but I’m not sure how to prioritize. My husband and I will probably gross around $85-$89k this year (ballparking numbers for his travel stipend, overtime, and minus some unpaid maternity leave for me). I make 31k and his base pay is $49k. We owe $5k on a car that we’re aggressively paying down and owe $70k on our home in a 15-year mortgage. We have no other debt. We have 3 months of expenses saved. He saves 15% between his 401k & Roth accounts and I save 22% between a 403b & Roth since my job just started matching. We have a 529 for our new baby. After all of this, I can usually count on at the very least, $1000 extra a month. Learning more about investment has been my new year’s resolution and I’m finding out that paying off our house probably doesn’t necessarily need to be as far up our list of priorities as I originally wanted it to be. I would love some help in putting together a new game plan. Thanks!

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