What Your Dad Never Taught You

The blog is moving

2008-05-13T13:38:00Z

Hello everyone. The blog is moving to www.petetheplanner.com/blog.

Here is my going away gift. It is my first radio show. You can listen to it here until it makes it on to iTunes on my podcast site. Enjoy

I have everything figured out (maybe)

2008-04-18T11:14:00Z

So I was reading yesterday that the airline industry is about to change for the worse (that is if you are a consumer). There will soon be higher prices for aisle and window seats. It will cost $1 for a can of Coke, and you will be charged for all of your luggage. Sounds terrible, right? I agree.

Here's the deal. The airline industry has decided that they want to stop losing money. That sounds reasonable, but I really don't want to help them make money either. I think that $200 is a good price for a person to pay to fly from the Midwest to Florida. I don't think that the $400 ticket that is on the way is in any way appropriate. I recently had a friend get his flight to Hawaii canceled because the airline went out of business while he was in the air. He then had to pay $2400 for a new ticket on a different airline to get to Hawaii. He had to get there to conduct business. Flying has become a very accessible mode of transportation for Americans, and that is all about to change.

Please allow me to Rube Goldberg us through this process.

-Oil is expensive for lots of political reasons.

-Therefore jetfuel prices are high

-Therefore airlines profit margins shrink

-Therefore some airlines go out of business

-Therefore other airlines have less competition

-Therefore they raise prices

-Therefore less people fly

-Therefore less people vacation

-Therefore people are more stressed

-And tourist destination cities lose money

-Therefore businesses in those cities lose money

-Therefore they lay off their already stressed out workers

-Therefore people have less money to live on

-Therefore they don't even drive due to high gas prices

-Therefore fuel demand decreases

-Therefore fuel prices fall

-Therefore jetfuel prices fall

-Therefore airline prices will fall

-Therefore people will be able to afford tickets

-Therefore airlines will have more flights

-Therefore they will hire more people

-BUT they will start losing money!

Okay, I don't have it figured out. Maybe you do. Let me know. pete@petetheplanner.com

The patience of landscaping

2008-04-14T12:55:00Z

I have a green thumb...wait...I think I have a green thumb. Actually, I'm not sure I know what that means. I like to work in my yard and on my landscaping. Does that mean that I have green thumb? Anyway, I learned something interesting this past weekend.

No, this won't be your run of the mill "growing" metaphor. Although, there is nothing quite like a "growing" metaphor to explain investing and patience.

I am, generally speaking, an impatient person. Not rude-impatient, just impatient. I don't like to wait for things, I don't like waiting in lines, and a month usually feels like a year. I have been researching some different plants for some of our landscaping beds, and have discovered that things cost more when you have no patience. If I were to buy seeds for some of these plants, then I would spend maybe 10% of what I would spend if I were just to buy the plant itself. Therefore, I either wait one year or more for the plant to grow to the size of the plants that I could just buy right now.

This is a mind-numbing conundrum for me. I have become somewhat frugal over the years, but my impatience usually trumps my frugality. Do I have my yard look the way I want it to now, or do I save money and have it look good next year? I have chosen a combination. I have planted some full grown stuff and some seeds.

How often would your patience help or hurt your budget? I know that usually is a challenge for me.

Martha Stewart, here I come.

Still alive and back from down under

2008-04-09T12:05:00Z

I'm back from a little interlude. I have traveled the world and now have a lot more to share with you. Since we have last talked I have been to two very exotic places: Fort Wayne, IN and Sydney, Australia. Let's leave Fort Wayne to your imagination and simply address the economics of a trip to the other side of the world.

I don't mind flying. It doesn't bother me at all....until now. I don't know if you have ever been on a 15 hour flight, but if you haven't, then I suggest you don't unless you can fly at least business class. You see, I sat in my coach seat for 15 hours trying to figure out how the American airline industry is struggling. We were packed in like sardines, there was no entertainment, and I ate a chicken/fish type dish for a 4am dinner. I completely understand that I was very fortunate to be going to Australia in the first place, but when you are jammed on to a flying city for 15 hours you really start questioning your existence. I told Mrs. Planner that I would rectify this situation on the way home. I told her we would check into upgrading to a better seat.

Sometimes your promises to your spouse in the heat of the moment don't really pan out. I called the airline to inquire about upgrading our seats on the way home. It was going to cost $8,000 per ticket to go business class and $30,000 per ticket to go first class. $30,000 TO GO FIRST CLASS! Okay, so what you are saying is that I pay the airline the same amount of money that I made my first year out of college in order to lay down on a plane and have a flight attendant hand me a hot towel? Needless to say we stayed in coach and we survived. It is slightly unnerving to think about people 50 feet in front of you having the time of their life while I am crowbarred between my wife and a lunch lady from Montgomery, AL who can't get enough of Sudoku.

Bottom line: don't pay to fly first class to Australia. It doesn't make sense.

Spring Break Tips with Pete

2008-03-19T12:43:00Z

Here is the video from yesterday's news. Enjoy

Spring Break Tips with Pete

Pete the Planner, defender of tax dollars

2008-03-11T12:51:00Z

I read the other day that the US Government is spending $42 Million to send us all letters explaining that we are getting checks sent to us later (the checks are part of President Bush's Economic Stimulus Package). While I appreciate the reminder that I will be getting a check, I don't really need a reminder. Do you need a letter telling you that Christmas is on December 25th? Do you need a letter telling you when Super Bowl Sunday is? Do you need a letter telling you when the NFL Draft is? Okay maybe you do, but I don't.

Let's band together to save $42 Million. Here is the plan. I will give the important details to this check you will be receiving, and you forward this blog post to everyone on the planet. If you happen to send it to your friend, Yoshi, in Japan, just be prepared to explain to him that he doesn't get a check.

Here are the details that matter:

You will be getting a check sometime in late Spring. It could be anywhere between $600-$1500. Don't throw the check away. It is not a scam. Use the money for whatever you want. The irony is that I am spending my check on our trip to Australia. So, although I am attempting to save taxpayers $42 Million, I am being a terrible American by spending my money overseas. I am going to spend the money boxing a kangaroo. Oh great, now PETA is going to be after me. I should have kept my mouth shut. Now it is going to be PETA vs PETER.

God Bless the USA

Does 1 new iPod equal 2 new iPods?

2008-03-10T12:41:00Z

What city in northern Ohio starts with a T, rhymes with burrito, and is the hometown of the new owner of my iPod? Well, it doesn't matter what town it is. What matters is why someone there has my iPod. Allow me to paint the picture.

It is a Monday evening, and I am in T-Town at the nicest hotel in T-Town (read: not a nice hotel). I am there for a financial conference for a company that I do business with. I had just finished my run along the river walk in downtown T-Town. There was a freezing rain storm during my run. It wasn't pleasant. I ran along the frozen river. Every other body of frozen water that I had ever seen looked different than this here river. This river looked like chocolate ice cream. It was dirrrrrty. Anyway, I finished up my run and the freezing rain had stuck to my face and clothes. My eyebrows looked like Andy Rooney's eyebrows. I was wearing black running tights, so I got to walk through the hotel lobby full of my colleagues looking like an extra from Peter Pan. This was not my best attempt at proper pre-planning for running on the road. I had forgotten my shorts to put over my tights.

So i finish up, and then go to the dinner and mixer. The dinner was a mashed potato bar, and the mixer was like a middle school dance. I could tell at this point that I wasn't going to catch a break during my time there. I mingle for about 20 minutes and then go off to my hotel room to work. I fall asleep at about midnight, and I wake up at 3 am to a Tom Petty Karaoke party in the hotel room next to me. Yes, this hotel was full of people from this conference, and a few of them took the liberty to party it up at 3 am on a Monday. I call down to the front desk hoping that they would throw the people in the Chocolate River. They didn't. They sent up someone to yell at the people, yet the party continued. I got up and grabbed my iPod and started listening to some random music to drown out the yelpings of a Tom Petty wannabe. Next thing I know my alarm is going off and it is time to go to the conference. I pack up my stuff, load up my car, and slump to the breakfast (liquid eggs and cantaloupe).

Long story short (too late), I finish the conference, drive home in a winter storm, and get home just in time to make dinner for Mrs. Planner's birthday. We enjoyed a nice dinner, and went off to sleep (hopefully Otis, our dog, wouldn't be singing karaoke). Just as I start falling asleep I shoot up in bed with my eyes wide open. I left my iPod in the hotel bed. It fell off when I was sleeping and I never grabbed it out of the bed. I saw it laying there, but simply forgot to pick it up. I called the hotel, and they told me to call back in the morning when the head of housekeeping arrived. I did, and guess what? They didn't find it. Hmmmmm. So what you are telling me is that someone not named Pete got a new iPod?

So what happens next? I am not buying a new iPod. I am not spending $200 because I lost my other iPod. By the way, this is the "moral of the story" section of the blog. Just because I don't have an iPod, that doesn't mean that I should just buy another one. This is how people jack up their budgets. I didn't plan on wasting $200 on something, and its not like I neeeeeed an iPod. Mrs. Planner and I are going to share hers. She suggested it. Not me. But hopefully you see me point. How many times have you replaced something that is not a necessity? I am guessing it blew up your budget that month.

Avoid T-Town.

Just a good egg

2008-03-06T14:01:00Z

I enjoy watching people who are good at what they do. It inspires me to try to be better at what I do. It doesn't matter how much money they make or how prestigious their job is. The only thing that matters to this special breed of people is being excellent at what they do.

Mrs Planner and I were in Chicago over the weekend and we went to a local breakfast place called the West Egg. Very good short order breakfast spot. It's a pretty popular place, and when we arrived we were greeted by a brutal line. There had to have been 25-30 people in line to eat breakfast. This is both good and bad news. The good news is that it is probably pretty good food; otherwise why would people stand in a line that long. The bad news was that I was starving and a line 30 people deep was quite discouraging. I went to the front of the line to put my name in with the host.

"How long of a wait?" I asked.

"20 minutes, sir." He replied.

"Okay", I said as I gave him my name.

I went back to Mrs. Planner and told her it would only take 20 minutes. We both stood in disbelief. How in the world were all of these people going to be seated in 20 minutes? We stuck with it, and by God he called our name in exactly 20 minutes. Exactly 20 minutes! We went inside and were seated near the host stand. I got to watch this guy work for the next 35 minutes as we ate. He was incredible. He started telling people, "17 minutes" or "18 minutes". And he nailed it every time. He had a huge smile on his face the whole time and he made sure that everyone's experience was great. He was truly great at what he did, and it had a huge impact on everyone he encountered.

It makes me want to be the best when I meet people like that guy. Does this sort thing inspire you as well? Does it inspire you as much as money and prestige? Be on the lookout for people like this, and make sure to let them know that they are doing a great job.

New weight loss plan

2008-02-26T14:18:00Z

Well, I haven't blogged in a while. It was due to my new diet plan. You haven't heard of the newest weight loss technique? Yeah, it's called the flu. Yes, good old influenza. Wow! 7 days and 9 pounds. I am now back from the near dead. I learned an important economic lesson during flu week.

I would have liquidated any account that I have to have felt better. I would have paid anything to feel normal.

Sidenote: My doctor's office makes you pay the co-pay prior to service now. It was kinda weird. Here is $20, now I am going to sit in your lobby full of the undead for 60 minutes, then go into a room for 5 minutes with a doctor and then leave.

I will be firing back up the content this week. Thanks for your patience. Cough.

Happy Valentine's Day

2008-02-14T15:51:00Z

WISH TV RIsk Tolerance spot

2008-02-13T18:42:00Z

Fresh off the press.

Click Here To View

If I gave you $140k, would you please go away

2008-02-13T12:22:00Z

Act like a tree, and leave --A classic middle school insult.

GM recently announced that they have offered buyout packages to their entire hourly workforce. That is 74,000 UAW members. The most that GM would agree to pay you in a buy out is $140k. That seems like good money. But, you have to sever all ties with the company. No healthcare, no pension, no Christmas Card. Nothing. You take your $140k and leave quietly. They are doing this to decrease the cost of their workforce. They will get rid of experienced (read: expensive) workers and bring in young (read: cheap) workers.

The older workers aren't being forced out, but they are certainly being enticed. What would you do? If, and only if, a worker had completely been financially savvy throughout their career, then this is a no brainer. There use to be this concept of retirement planning that said there were three components to retirement. Your pension, your social security, and what you do on your own. Most of us today simply are planning as though we are going to have to retire completely alone with no help from the government or our employers. UAW members have been taught to rely heavily on the union, and therefore may not have done a great job of saving for retirement outside their pension.

Are you in a position to walk away from your current employer for $140k? You won't have any ties to them once you leave. Let's say Pete the Planner (the company) gave Pete the Planner (the planner) $140k to leave, would he? Yes, he would. But he would soon open a new company called Peter the Planner.

Driving 100 miles for cheaper gas

2008-02-12T14:32:00Z

I saw a story on 60 minutes on Sunday about the production of the penny. It costs the US mint almost two cents to produce the one cent penny. It also costs them about 10 cents to produce a nickel. This is like when you try to trick a little kid into giving you one nickel for two shiny pennies. Okay, maybe I just try to trick little kids out of their money.

How can we continue to rely on such poor economic decisions? The government has now made it illegal to melt down coins because the raw metal is worth more than the money itself. If it wasn't illegal, you could melt your change and simply double your money by selling the raw metals. Double your money! Wow! But, it is illegal.

Isn't this a lot like your buddy who will drive 100 miles to get a good deal on gasoline?

What a beautiful coin. No wonder it costs so much to make.

There's a pill for that

2008-02-07T13:35:00Z

A personal trainer friend of mine told me a crazy story the other day. He has a new client who is a cardiologist. The cardiologist doesn't want to be a client of my friend, but his wife is insisting that he works out (we've all been there). Anyway, the cardiologist believes that working out is pointless. My friend, being a personal trainer, thought this was odd so he asked the cardiologist why. The cardiologist said that he doesn't believe in a good diet or regular exercise. He believes that advances in medicine are enough to keep you healthy. He said that cholesterol medication, angioplasties, and other heart procedures are the most effective way to remain heart healthy. He said that exercise and health eating are myths created by the media. WHAT? As you can imagine, my buddy thought that the doctor was kidding, but he wasn't. Can you imagine if this was your doctor?

Would this be the equivalent of a bankruptcy attorney going into bankruptcy on purpose? A total disregard for discipline is pathetic, but especially for an individual who is an "expert"on a given topic. WOW.

Are you purposefully ignoring areas of needed discipline in your life?

Does money (or lack there of) affect your vote? And other rhetorical questions

2008-02-06T14:58:00Z

Do you think there is a clean delineation between Democrats and Republicans when it comes to economic status? I use to think there was, and even these days I am not sure. Politics often lead to sticky conversations about social ethics, moral ethics, and financial ethics. If you had to rank how these ethical questions affect your vote, what conundrum is at the top of the list?

Is the threat of higher taxes enough to dissuade you from voting one way or the other? I think it is if you view your personal wealth and security as your main objective. If you are socially liberal, but fiscally conservative, where does this leave your vote? How can (what you perceive to be) important social programs be implemented without increasing taxes? These are tough questions that Americans are dealing with. Are you willing to sacrifice your personal wealth to advance the cause of the nation? Wow. How can you even begin to decide this?

This may sound like I favor one side over the other, but I ask the simple question. Are you willing to sacrifice your hard earned dollars to accomplish your world ambitions? My answer to this question changes all the time. What is your answer to the question? Is your economic status more important to you than the nation's as a whole?

I would love your comments.

I really don't know where I stand on this. I only know three things to be true in this world: death, taxes, and there were no dinosaurs. How many rhetorical questions to I ask in this blog post?

A Giant waste of money and some other randomness

2008-02-05T14:13:00Z

We all waste money. I like to detail major wastes of money. Here is one for you. The New England Patriots organization applied for a copyright on the phrase "19-0" early last week. At the time they did this they were 18-0. Therefore, they spent thousands of dollars in legal fees to protect the phrase "19-0". They did this so that they can extort money out of anyone that says the phrase "19-0". Just like Donald Trump did when people say the phrase "You're Fired".

Well, they should have applied for a copyright on the phrase "18-1" or "19 and oh no". My bottom line is that spending thousands of dollars on copyrighting a phrase that doesn't apply to your current reality is a bad idea. Thank you New York Giants.

-Who is in the best position right now with our "housing crisis"? People who currently rent and are looking to buy. You can get a steal of a deal on a house, and you can get a great interest rate. If you currently are renting, and are looking to buy in the near future, then start thinking of today as the near future.

-Beware of housing mistakes right now. Yes, prices are low, but that generally means that the house you are in right now has deflated in price as well. Don't commit to buying a new house unless you have a solid plan for your current house.

-Don't be afraid to refinance over the next 6 months. Rates are falling, and you can replace a bad loan with a good one. Experts usually want you to refinance if you can reduce your rate by at least 1%. This is a good rule of thumb, but based on your loan, less than 1% can make a difference too.

-Al Gore may not be part of Super Tuesday today, but there were thunderstorms last night that were incredible. Sure, 60 degree weather and thunderstorms on Feb 4th are completely normal....

I love a free market economy

2008-02-01T15:09:00Z

I love capitalism. I love a free market economy. I love the fact that a company can take advantage of supply and demand and make a great deal of money...........but sometimes it goes too far.

What do I mean?

Well, price gouging is one example. During 9/11 some gas stations jacked up prices when people were panicking. This was clearly unethical and illegal. That example is quite obvious. I don't even think there is another way to look at that situation in which it seems like a good idea.

But what about this situation?

Exxon Mobile has just recorded a record year for a U.S. company. They made $40.6 BILLION. Okay, let me break this down for you. We are in the midst of a recession because oil prices are sky rocketing. The theory was that oil supplies were low, thus there wasn't much room for profit, but Exxon somehow managed to have the highest recorded profit in the 231 years of the United States. Is this unethical?

Don't get me wrong. I love a free market economy. But this seems crazy. We are potentially looking at a terrible economic time, but Exxon, which affects our economy, is having the greatest time....ever...ever...in the history of ever.

I would love your comments. I assure you that I am not a communist. Nor a socialist.

What are you going to do...

2008-01-28T13:56:00Z

What are you going to do today to better yourself financially? Hopefully something good. Sometimes "not going backwards" is as good as going forward.

If you don't have the ability to do something great today, then just avoid the dumb mistakes. Why eat an $11 lunch when a $5 lunch will do?

Heck, put a penny in your kid's piggy bank. That would be a good thing.

Feel free to send in a comment with your good financial deeds for the day.

Who are you voting for? Why?

2008-01-24T20:21:00Z

I never talk politics unless I feel like putting my half-way decent name at risk. But, today I am all fired up over the Economic Stimulus Package.

Mrs. Planner forwarded me the following website. It asks you where you stand on "the issues", then it tells you what presidential candidates agree with you. I was shocked to see who I line up with.

I might actually starting pulling for this person. Wouldn't it be nice to know why you are pulling for someone? I usually just vote for the one that doesn't anger me.....as much.

www.electoralcompass.com

Enjoy.

400 jars of mayo or a new laptop

2008-01-24T18:33:00Z

Congress just announced that they are passing the economic stimulus bill. That means that you will be getting a check in June for $1200 from the government. The idea is that you will spend the money, thus sending the economy propelling up into the heavens. Far be it for me to question the most powerful former baseball team owner in the world, but I don't get it. Giving someone $1200 to spend seems like a bad idea long term. The problem is that Americans don't save. Basically the plan doesn't work if we choose to save, invest, or donate the money. Saving, investing, and donating are the things that we Americans need help with.

Therefore, I have decided to do exactly what Sammy Sosa's former boss says. I will spend the money. I have put together a list of things that you could spend your $1200 ($600 if you are single. It might be a good idea to find someone that is willing to marry you...soon) on. It really doesn't matter what you spend your money on. You could go to Target, buy 5 cartloads full of stuff and burn it. You are helping the economy.

Here is the list

1. 400 jars of Hellmann's Mayo

2. MacBook

3. 1200 junior bacon cheeseburgers from Wendys

4. 48 bags of Monkey Picked Tea

5. 3.48 annual memberships to the bacon of the month club

6. 100 copies of What Your Dad Never Taught You About Budgeting

Waste your money wisely. Your country is depending on you. This plan may work, but are we constantly going to just put patches over huge holes?

-Pete the Cynic

Wow, that was a crazy day

2008-01-23T16:09:00Z

Long story short. That was one of the craziest days in the market that I have ever seen. The market started off down almost 500 points, and then due to the emergency rate cut it only ended up being down 130.

Our local CBS affiliate called me to help them with a story they were doing on people flipping out. You can view it below.

The Lesson for Yesterday: Nothing is worth freaking out over. Everything ended up okay.

News Clip

Breaking News*** Emergency Rate Cut by Feds

2008-01-22T13:45:00Z

This is huge Breaking News. The Fed just made an emergency .75% cut in rates in order to curb the imminent stock crash for today. Analyst believe that the Dow is headed for a 500 point loss today.

Will this government intervention work? We will talk in 7 hours.

Do it yourselfers, re-evaluate

2008-01-22T13:09:00Z

I had a friend who recently suffered hail damage to his roof. True story. He is a very handy guy who doesn't really like paying to have things done that he could probably figure out himself. He also was in a little bit of a cash crunch, so he wanted to do this on the cheap, and pocket a little bit of the insurance check. I don't know the rules about insurance checks; thus that's not the point of the story. Re-roofing a damaged roof is a pretty basic process that happens to take some very specialized skills.

The real questions here are: Is it worth risking your homes' contents? Is it worth risking your safety? Is it worth the problems with resale? When a real bad storm comes, will your amateur job do the trick?

Basically what I am saying is that doing it yourself is easy when things are good. Doing it yourself when times get tough is really really tough.

Anyway, my buddy fell off his roof. Hurt his back, and ended up spending more on rehab than he would have if he would have paid to have his roof replaced. Do it yourselfers often end up in a worse position once the bad begins. The bad always begins, you just need to know how to deal with it. Get help if you need it. Don't go cheap.

The market is going to get stroked today.

The good news: the first season of Dharma and Greg was just released on DVD. Who cares, you say? No one does, but I didn't want to leave you with the news that the market is going to get killed today.

Intern Diary Day #1: The John Fields Experiment

2008-01-21T15:20:00Z

Today our intern started. Here is his intro to this blog.

Pete the Planner: John, how much money is a lot of money?

John: Six figures

PTP: Like $750k?

John: $100k is a lot of money

PTP: Why didn't you say that in the first place?

John: (Makes uncomfortable face)

PTP: Just kidding.

PTP: What do you hope to learn?

John: I want to learn to be a financial planner.

PTP: Was Merrill Lynch not hiring?

John: He was, but I have more to learn from you.

PTP: You know Merrill Lynch isn't a person, it is a firm.

John: I know

PTP: Are you overpaid

John: No

PTP: We will see.

Good luck, John.

Rocky day ahead

2008-01-21T14:13:00Z

The world markets got crushed today. Many of them fell between 3%-7%. This is in reaction to President Bush's new economic stimulus package. I'm guessing the world doesn't think it will work.

So here's the question. Will our market react to the world markets' reaction of President Bush's reaction to our nasty economy? Stay tuned.

Have any questions? pete@petetheplanner.com

Update **** The market is closed today ****** The rocky day will have to wait.

Should you be able to sell your...

2008-01-21T13:42:00Z

Welcome to a very disjointed and uncomfortable blog entry. I apologize in advance for your discomfort, but I think this is interesting.

I had a friend email me last week in regards to this ethical question: Should you be able to sell your organs? Yes, in itself it is a disgusting question, but an interesting one nonetheless. Let me first start by saying, "I don't think that you should be able to sell your organs for profit." But I am going to argue that you should be able to.

Let's start at the beginning. In the beginning....you know the story. From a religious standpoint, selling your organs seems like a one-way ticket downstairs. I am not a religious scholar, but I am guessing it is a bad idea.

You can sell blood plasma, why shouldn't you be able to sell other pieces of your body. In fact, I just put my receding hairline on eBay.

Let's say that your house is in foreclosure, and if you sell a kidney, then you could save your house. Should you be able to do this?

Would organ transplants increase if people were allowed to sell their organs? I am guessing they would. That means that more people would be helped.

Should a family be able to sell a deceased persons' organs at the deceased request?

This is a pretty crazy topic, huh?

This topic proves one thing. Money has nothing to do with money. It just seems wrong to sell your organs, yet it would help you financially.

Bulls and Bears

2008-01-18T14:20:00Z

You often hear people describe the financial markets as either a bull market or a bear market. This can be confusing and people often mistake one for the other. Let me try to unravel this a little bit for you.

A bull market is when investor confidence is high, and the masses are making money. People are feeling as though the market will continue to produce capital gains. It is called a bull market because the "herd", the term used to describe the majority, is in agreement that the markets are good. The bull is a herding animal, and thus the term bull market.

A bear market describes a financial environment where there is widespread pessimism. A bear market is when things aren't going well in the financial markets and people don't feel positive about the immediate future. I have no idea why they call it a bear market, and frankly the bull market reasoning is dumb too. So I created my own story.

Wanna hear it? Here it go.

Back in the middle ages, there was an evil wizard who was also a tax collector. His names was The Great Bernanke He would ride through the streets of the village and collect taxes. Since there were no mo-peds back then, he rode one of the animals from his petting zoo. Let's for the sake of argument call it an evil petting zoo. The wizard had two favorite animals that he would typically ride though the streets. He had his work vehicle, a bear, and he had his recreational vehicle, a bull. When he rode his recreational vehicle, the bull, he wouldn't collect taxes. This made the villagers happy; thus the term a bull market. When he came through the streets on his bear, then the villagers were forced to pay taxes and were subjected to an occasional mauling. Thus the bear market.

See. That was a much better story. Just remember: bears can maul you, and that is bad. Bulls could run over you, and possibly gore you, but if you avoid Pamplona then you should be fine.

I'm bearish right now. Grrrrrr.

What does your bank do for you

2008-01-17T20:05:00Z

I have always thought that banking was a commodity. (A commodity is anything for which there is demand, but which is supplied without qualitative differentiation across a given market.) Okay, I "borrowed" that definition. Here is my real definition. A commodity is a product or service that isn't easily differentiated. I wonder if Cal Ewing, the Patron Saint of High School Economics, would approve of that definition.

Anyway, a bank is bank. Right? You keep your money there, they charge you dumb fees, and then you complain about it. Well, it turns out that I am wrong. [Mrs Planner: "Nothing new there"] I started thinking recently about the relationship with my bank. What relationship? I have banked with them since I was in 8th grade, and I never really had an ongoing relationship with anyone. I know that I mainly use online banking, but if I have real problem...who do I call? This started to bother me. I was contacted by another local bank recently, and they had me in to the branch to discuss what they could do for me. Frankly, if they just called me by name, then they could have my business. I always like being on a first name business with people. You know, like Norm on Cheers. [Side note:Being on a first name basis with a Bail Bondsman is not good.]

Well it turns out that the new wave of banking is all about turning things back to the old school. Shell-toed Adidas, Kangol hats, and thick gold chains. Okay, maybe not. In this case, the old school is the fact that they want to know your name. Novel concept, right?

So, I switched. I also found out that there are no fees on my new accounts, I got a free safe deposit box, they game me 200 bones for switching [not actual bones; that would be weird; money, people, money], and I got a personal banker. What's a personal banker? I still don't know yet, but I have someone to email and talk to when I have questions.

I feel that I was properly rewarded for not doing things status quo. I had realized that I had been complacent with my banking. I will update you in six months when all the hidden fees show up.

Home Construction drops 24.8%

2008-01-17T13:57:00Z

Another bad report this morning, but I think that there is a silver lining on this one. I would attribute some of this to tightening lending practices. People can no longer build a new house with bad credit, no money down, and a handshake. The reality is that too many people are living in houses they can't afford.

This drop in construction is bad for the economy, but it is a product of our economy trying to correct itself.

Sorry about all the bad news. Here is some good news. Uhhhhhhhhh...thinking........uhhhhhh.....okay.....I got nothing in terms of good news right now. Wait. The Monkey Picked Tea post from earlier can be our good news.

Inflation is deflating

2008-01-17T13:26:00Z

A report came out yesterday detailing our latest inflation rate. Not good news. We have the highest inflation rate in 17 years. This is due to higher fuel costs and higher food costs. Reportedly gardeners who ride bicycles weren't affected.

Give me an R. Give me an E. Give me a C. Give me a.... okay I'm trying to get you to spell recession.

Workers' wages haven't kept up with the higher inflation rate. This means that we are making less, and stuff is costing more. It's like when my favorite bagel place shrunk their bagels and increased their price. Let's just say that I considered switching to crumpets.

The rate of increase was 4.1%. In 1990 the rate was 6.1%. Did you get a 4.1% raise for 2008? If not, print off this blog post and give it to your boss. I don't do well with confrontation though, so if your boss calls me then I will probably agree that you got the raise you deserved.

Monkey tea?

2008-01-17T01:40:00Z

First, thanks to all of you who emailed and called in regards to my last entry. I will keep you posted on my client's recovery.

What possibly could follow the most serious piece that I have ever written? Monkey tea. Make that Monkey Picked Tea. That's absolutely right. Tea that is picked by specially trained monkeys. The site claims:

Nowadays the practice of monkeys picking tea has all but died out, except in one small remote village where they still continue this remarkable tradition. No monkeys are harmed or mistreated in order for us to bring this rare brew to you!

This tea can be purchased for $25. Proving once again that we humans can come up with some pretty creative things to spend money on.

Buy it here

I can't say for sure that buying Monkey Picked Tea is a good financial tea, but I can tell you that it may be worth $25 for a great story.

Let's hope the monkeys washed their hands. Because the last time I was at the zoo, a monkey tried to throw...........never mind. Monkey tea....he he he.

This is important stuff because ultimately it's not important

2008-01-15T23:34:00Z

Hopefully you realize by now that this blog is and isn't about money. I know that we discuss money quite a bit, but you should know that we talk about it because it is a necessary evil. The reality of the situation is that I want you to have your money taken care of so that you can worry about life. Money is supposed to be an afterthought, but a correctly handled afterthought. You should be so comfortable with money that you don't have think about it. You shouldn't be so uncomfortable about money that you choose to forget about it.

Why?

I asked myself that same question last night when I drove home from a client's house. Here is a great young couple who have been trying for about two years to start family. They knew that the growth of their family was out of their hands, so they just made sure to take care of everything else they could. They setup the proper investments, they developed the proper habits, and they cared just enough to ultimately not have to care about their money. Well, eventually they got pregnant and had a beautiful little girl 6 months ago. Their daughter has a beautiful full head of hair and cherubic smile. They had me out to their house last night to "get some things in order". We did some basic stuff, I answered some great questions, and the meeting was just wrapping up. The new mother quietly left the room as the proud new poppa and I finished up some business.

Once his wife had cleared the corner, he looked at me with concern and said, "Pete, we had you out here tonight so that we can just forget about our money for a little while."

"Okay", I said.

"(My wife) left the room because she would cry if she stayed in here. Because we found out just recently that she has cancer, and she is having a masectomy tomorrow."

And there it is. Age 32, new mother, and now dealing with Breast Cancer. Yet, they had the wherewithal to take care of some basic money needs so they could "forget about their money for a little while."

That's why this is important. Life happens. You should care about your money now, so that you can forget about it when you need to.

Get better soon L. Our prayers are with you.

Did you buy gallons of water?

2008-01-14T13:09:00Z

Do you remember 1999? I hope so. It wasn't that long ago. Did you buy a bunch of supplies? Water, canned goods, flashlights, short wave radio. I didn't, but still felt prepared for whatever the year 2000 had to offer. People were frightened by the Y2K bug. It is slightly laughable now, but it was scary then. Many people over-reacted, and vice versa many people under-reacted. But all parties were fine.

I bring this up because you are going to hear, read, and see a tremendous amount about our economy in the next couple of months. The NY Times this weekend all but put us smack dab in th middle of a recession. It is scary. I felt uneasy after having read the article. Your first reaction is one of evaluation. Should you do anything different? Should you move your investments? I know I talked about recession last week, but believe me. This is just the tip of the iceberg.

Here is my super simple recession survival guide.

1. A flashlight. (I don't know why. It just seems like it should be on a survival list)
2. Make sure you have a three tiered savings and investment plan. Short term savings in a savings account or money market. Mid-term savings in balanced mutual funds (nothing risky). And finally your retirement savings in a properly allocated portfolio. You need all three. This is also the time that some people find out that their is a downside to aggressive investing. Yes, 38% returns have been nice, but there is a downside.
3. Don't panic and sell. If retirement is close, or if you need your money for a house or something, then consider moving some to cash. People who are 6 or more years from retirement, just relax. The market will find its way back up.
4. This is a good time to work on controlled spending.
5. Don't listed to the media. They are just trying to scare you. They just want you to watch their show. We have been through this before, and we will go through this again.
6. Freeze-dried ice cream.
7. Be weary of a do it yourself stock portfolio. This is not a time for amateur stock picking.

This post isn't meant to scare you. It is simply meant to relax you. Don't do anything drastic, and seek professional advice if you are unsure what to do. Remember there is no reason for 95% of you to freak out. The other 5% should have freaked out a long time ago because they were doing the wrong things anyway.

Recess is the root of recession, but recession isn't as fun as recess

2008-01-11T14:29:00Z

If you are like me, then you can read. I read earlier this week that Goldman Sachs thinks that we are heading towards a recession. By we, I mean our country. Let's discuss.

First what is a recession?

A recession is a pull back in the economy. It usually means that the Gross Domestic Product (GDP) declines and there is usually negative economic growth. Much like my hairline, a recession, simply means that thinks are going the wrong way, backward.

Should I care?

Caring and awareness are different. You should be aware of how it affect you, but I don't really think you should care. You can't do anything about it (much like my hairline).

What if the recession lasts a while?

Then it is called a depression. Then things get a little depre.... sad. A depression is when a recession goes longer than a few economic quarters. Usually energy costs are super high, interest bearing accounts are really low, and no one wants to do anything but sit on their money.

Will this affect my investments?

Of course it will. Whether you are in CDs or in the stock market, it will affect you. But, you simply need to examine your goals. If you have mid or long term goals with your assets then you really shouldn't do anything different. You don't want to be out of the market when it heads back up. If anything, continue to invest. It will lower your cost basis. Always ask your financial planner what they are personally doing with their money. I may not be your advisor, but I am investing more than I usually do right now. I realize that the market is pointing slightly down. The further it goes south, the more I am investing.

Pete, why did you always end up missing part of recess in elementary school?

My answer is simple. I needed the teachers to feel like they were doing their job. I felt as though I was keeping them company as I stood facing the wall. Okay. You don't believe me.

This weekend's quasi-comfortable discussion

2008-01-11T13:06:00Z

How much are you comfortable spending with out first consulting your significant other? Can you spend $100 without discussing the purchase? 500? 1000? Does your partner have the same number?

I think that my number is $100 with Mrs. Planner. It's not that I feel that A) I need permission $100 is a lot of money or C) I can't make money decisions on my own But I frankly can't think of something I would need that costs more than $100 that I can't take the time to discuss. I feel that the discussion helps hold me accountable to our financial goals.

Some of you may find that this could be the root of some deeper issues. I will not be held liable for possible progress.

Discuss.

****Gift purchases for the significant other don't count.

This seems like a good thing....why are you complaining

2008-01-10T13:00:00Z

Why can't good news just be good news?

An Indian automobile company has just released the $2500 Tata (available in India). It is an ultra-compact car that is meant to bring transportation to the masses. This seems like a good thing, right? Finally an affordable solution. Finally an automobile company that isn't raking you over the coals. Oh, but wait. People are up in arms.

You see, critics are saying that the car is too affordable. The argument is that too many people will buy the car, and there will be traffic problems and environmental problems. Okay, so let me lay this out for you. Some group of environmental killjoys with cars don't want a bunch of less fortunate people to have cars because of the chance that there will be increased traffic. In other words, there needs to be people that are poor without cars, so that the car-owning middle and upper class can get to work on time.

I am glad that the Western way of life has finally made its way to India. What's next for India? Surely they wouldn't get involved in sub-prime lending.

******Exciting announcement***********

The PTPWHQ (Pete the Planner World Headquarters) is proud to announce the hiring of a new intern. We are now shaping the impressionable minds of American. God help us all. The intern doesn't know it yet, but he will be blogging. Shhhhhhh. Don't tell him.

An easy choice

2008-01-10T12:32:00Z

I always feel on edge between January 1st and April 15th. It is tax purgatory. The previous year is over, but you now get to face Uncle Sam and his minions. I don't like the feeling of owing anyone anything, but owing money to Uncle Sam is a normal occurrence. Owing money to Uncle Sam at tax time is not necessarily a bad thing. Well, as long as you still have the money to pay.

The one interesting part about this time of year is the IRA rules. As long as you qualify for a contribution, you can make your 2007 and 2008 contributions between Jan 1 and Apr 15. That means that if you are under 50 then you can contribute $4000 for 2007 and $5000 for 2008. If you are above 50, then you can contribute $5000 for 2007 and $6000 for 2008. The best way to contribute to any investment is to contribute regularly on a monthly basis. But if you have neglected to invest on monthly basis, then make sure you still make a lump sum contribution. It will certainly make the tax time blues go away.

Do you have any spare change

2008-01-09T13:07:00Z

Sometimes (a lot of times) financial change is necessary. You eventually figure out that what you are doing is a bad idea, and you need to change your ways. As we have discussed many times before, financial changes and diet changes are two of the hardest things to do.

Let's cut to the chase here. There are two things that eventually get someone to change. The either A) get a great vision of their future after the change or they can't handle the pain that their current lifestyle inflicts. In other words, they choose to change because they have created a great vision, or they are forced to change because if they don't they will cause unrepairable damage to their life.

Do you start eating healthy when you have a heart attack? Do you start paying attention to your finances when your house is foreclosed on?

My suggestion is that you start to visualize what you want in this world. Do you want good health? Do you want financial stability? Ride that vision until it is crystal clear, and then you are on the way to making a change. Don't let your unwillingness to change make the choice for you.

P

Pete's Latest TV Appearance

2008-01-08T14:09:00Z

The Clip

Enjoy the clip. Nothing like trying to pay off holiday bills. Make sure to look back on 2007 to evaluate the good and the bad. Then look forward to 2008 and start setting goals. You won't accomplish anything great unless you set your goals in your sights.

Back in the saddle...and other terrible cliches

2008-01-07T14:31:00Z

Some of you may have wondered what happen to the Pete the Planner blog. You may have thought that I was part of the Hollywood Writer's Strike. You may have thought that I was on vacation. You may have though that I was lazy. You may have thought that I had run out of original material. Well, some of you are right.

I'm back and ready to spill my knowledge.

Here is what I have learned over my two week vacation.

1. When people have nothing to do, spending money seems like a relatively good idea.
2. I used a lot of cash during transaction, and ended up with an incredible amount of coinage.
3. If you buy a tube of wrapping paper on Dec 23rd it may cost you $4.00. If you buy it on Dec 26th, it may coast you $.40.
4. Bad sweaters are a timeless gift.
5. Painting a room is an acquired skill, not something you randomly do on a Saturday
6. If I had a dollar for every bowl game....

On a serious note. Did you do it? Did you speak the infamous phrase?

I made $______ this year, and we have nothing to show for it.

Look back on 2007 and make sure that you aren't speaking the infamous phrase. If you do, continue reading this blog.
The blog is back and strong. Stay tuned for a great year.

Further evidence that money has nothing to do with money

2007-12-13T14:39:00Z

I have said it one million times. Money has nothing to do with money. In other words, money is about discipline, emotion, respect, and common sense. I just finished reading an article that expands this though even further. A former WWII veteran was just payed $725 by the US Army for giving him an unfair trial 63 years ago. The Army imprisoned Samuel Snow for participating in a brawl on an Army base. There were a number of soldiers involved in the brawl, and many were imprisoned. He was sentenced to 15 months in prison. It was later discovered that he didn't participate in the brawl. Oh, yeah and there is a ton of racial discrimination in this case. Read the article. It is heart-wrenching. Here it is.

After reading the article you realize that the $725 that the Army is paying him is more than insulting. He was considered a criminal for 63 years, he spent 15 months in prison, and they sent him a check 63 years later for $725. Money has nothing to with money.

Merry Christmas

2007-12-12T16:08:00Z

Harvard is the greatest place on the planet

2007-12-11T13:20:00Z

As if you needed any more reasons to love Harvard, here is one more. Harvard has done away with all loans, and made them grants. They have the most advanced financial aid program on the planet. If your family's income is $60k or less per year, then you pay nothing. If you make between $60k to $120k then you pay a percentage of your income (not to exceed 10%). And if you make $120k-$180k then you pay 10%.

That is genius. Their endowment is so huge that they don't need your tuition money. They are more concerned with getting the best students. They will give you a free education as long as you qualify. Compare that to normal state universities that just want your money. How many times did you feel like your college was nickel and diming you?

So what's next? Well, it's simple. Get your kids into Harvard. It is worth it.

The bail out

2007-12-10T12:58:00Z

Last week President Bush signed a bill that would freeze sub prime mortgage rates for a number of years. This was meant to "bail out" the American Public. I feel weird about this. Here are some things to consider:

-Did the American people know what a sub prime loan was? Did they understand what they were buying?
-Were they misled by aggressive mortgage brokers and builders?
-Will these people learn a lesson if they are bailed out?
-Will this bill give these people the chance they need at financial redemption?
-What about the financial institutions that issued these loans? They are forced to lose money.
-There is no financial education program linked to this bill.

Although I want Americans to get some help with this terrible issue, I can't help think that this seems like parents sticking up for their kids when they shouldn't. As you know, Mrs. Planner is a high school teacher. She often gets calls or emails from parents asking her to change their child's grades. The kid earns a "C" on a test, but the parent wants to negotiate the "C" into a "b" because "the kid was tired from a late night swim meet." Tough lessons are though to learn, but that is why they are called tough lessons.

Is a gift card a good gift

2007-12-06T12:15:00Z

We all struggle with this age old question. Actually, its not that old. But, a question we struggle with nonetheless. I love receiving gift cards, but I am always unsure on whether I like giving them. Economically, they make sense. You allow someone to pick what they want, thus eliminating the possibility that they get something that they don't want.

Is it thoughtful? I think so. You are being thoughtful enough to not get them something lame. Unfortunately there is always the possibility that you get a gift card to a store you don't shop at. Man! This is getting complicated. Okay. Gift cards are better than lame gift cards, more thoughtful than cash, but not as tacky. How's that?

My point: Don't have one...today

How do you run to the border?

2007-12-05T14:05:00Z

I had a friend in college who use to make us stop at the ATM every time we would make a late night run to Taco Bell. He wanted to know what sort of menu delicacies he could afford. If he had $6 in his account, then he would usually get a Mexican Pizza and a Chalupa. If he only had $3, then he would get two Chicken Soft Tacos and a Meximelt. Although I appreciated his attention detail, I thought this was a rather ridiculous way to spend money. Little did I know that online banking would allow millions of other people to "run for the border" the same way.

Online banking is a technological innovation that the banking industry has brought to us. Our job is to harness it's convenience, and better our financial lives. Unfortunately, we have leaned on online banking, and now it could be our downfall. Many people today simply log on to their bank accounts daily to check their balances. They then spend whatever is left in their account. This is not the way online banking is meant to be used. It is impossible to get ahead when using this technique because you always spend what is left. People log on and then decide if they can afford a good lunch or a cheap lunch. It is liking opening your fridge and eating whatever is inside.

Do you do this? Do you do anything like this? If so, STOP. And if all else fails, make a trip to the Pete the Planner World Headquarters. I will yell at you with a smile on my face, and then we will go grab some lunch. You're buying, so make sure to check you balance.

What's your reason

2007-12-03T13:55:00Z

The holidays are upon us. That means that you probably are going to be purchasing some gifts for some folks. I think that gift giving is fascinating from a sociological perspective. I find that there are a number of reasons that people give gifts, and a number of different reasons you buy what you buy.

People buy gifts for others out of love, guilt, admiration, appreciation, tradition, reciprocation, fear, and finally the good old holiday spirit. Why do you give? I'm sure your answer is different based on who you are giving to. The next variable in the giving equation is: Why do you buy what you buy for the person you are buying for?

Here are some possible reasons that you choose to buy what you buy.
-You think that the receiver needs the item.
-You think that the receiver would like the item.
-You think that the receiver would be impressed that you bought them the item.
-You want to show the receiver that you can afford the item.
-It is a forced gift exchange and you bought the first thing you could find under $10 at the drug store.
-You like the gift and you want the receiver to not use the gift so that you may use it.
-It is the only thing that you can afford.
-It has sentimental value.
-You are re-gifting.

I like to think about all of this when I am buying gifts just to make sure that I am doing things for the right reasons. Maybe you need to take yourself through the same process.

I love this world

2007-11-30T12:32:00Z

What does it take to get you to smile? Are you more excited by a monetary windfall, or something hilarious that randomly happens in life? That is a loaded question. Would you rather receive $100,000 or see something crazily funny like a turtle riding on a deer's back? Yes, that is the stupidest question ever asked, and no I am not on medication.

The reason I ask.... I spoke to a group of retirees the other day at a local University, and I saw the funniest think that I have ever seen. I was in the midst of my presentation, and I was scanning the crowd of about 200 to see if anyone was still listening to my mindless banter. There was a guy with a seeing eye dog in the front row. Let me digress for a second. Seeing eye dogs are the most incredible things in the world. They completely change blind peoples' lives. A dog leads the person around! It is incredible! Anyway, back to the story. My eyes wander over towards the blind gentleman and his German Sheppard. They were yawning at the same time. The guy was stretching his arms upward while he was yawning, and his dog was on his side stretching all four paws out. It was easily funniest thing I have ever seen. Not only was I boring the guy, but I was boring his dog. I was trying to figure out what that moment was worth to me. Honestly, I think it was worth at least $1000. I truly believe that I would have turned down $1000 in order to see a blind guy and his seeing eye dog yawn during one of my speeches. It was awesome.

Am I crazy?

The shopping has begun

2007-11-26T14:30:00Z

Last Friday was the beginning of the holiday shopping frenzy. Mrs. Planner and I actually participated and got all of our holiday shopping finished. Our secret is to go to an outdoor mall in 25 degree weather. There are no crowds.

Here is another way to avoid the malls and the crowds. Today is called Cyber Monday. It is the day that all the online retailers have special deals set up for you. Go to www.cybermonday.com to learn all about. If you are going to shop for your loved ones, I would at least like you to get the best deals.

Have fun.

Thanks Giving

2007-11-20T13:35:00Z

Turkey time. This is my favorite holiday. It is all about family, thanks giving, and food. The materialism of present-day Christmas has become daunting; thus (short of the important religious implications) Thanksgiving has become the new Christmas. I love the idea of just relaxing and reflecting on Thursday.

Although I said there are no gifts. I do have a gift for you. My Vegas Podcast will be posted soon. You won't be disappointed. Happy Thanksgiving!

Pete on WISH-TV today...Money and Marriage

2007-11-13T20:29:00Z

Into the Fire

2007-11-13T12:21:00Z

Where is money treated like Kleenex? Where do people forget every piece of financial sense that they ever had? Where can you look at the Eiffel Tower in 110 degree heat while standing next to a guy in a sleeveless NASCAR shirt from South Dakota named Earl?

Vegas.

I will be traveling to Vegas for a business conference this week. I don't like Vegas. I'm not necessarily against gambling. I don't plan on gambling when I'm there. Mrs. Planner and I are doing some home improvements, therefore I don't see how dropping $200 on blackjack seems like a good idea.

I will be taking the Pete the Planner recording studio with me (my video camera). That means video podcasts for you. Viva lost wages. Oh, and I will be posting my travel blog. Always a good time.

Death and taxes...not bonuses

2007-11-07T16:18:00Z

Some things are certain. Some things aren't certain. Certain: death, taxes, my hair loss. Not certain: my Nobel Prize Application, Dick Clark's age, and bonuses. Bonuses? Yes, its that time of year again when many Americans turn their watchful eyes to their potential bonus payouts come year end. I have seen bonuses both greatly enhance and destroy peoples' lives.

Employers are smart (my employees may not think so), they know that you will generally give more effort when they tie your compensation directly to your results. Smart employers pay bonuses quarterly. Employers are let off the hook if you don't reach your goals, but oddly enough we don't let ourselves off the hook. Most people count on their bonuses despite the fact that they aren't guaranteed.

I have a client whose bonus doubles his base pay. He is forced to only depend on the base pay. If he were to depend on the whole thing he could be in real trouble. It would be catastrophic. He does it the right way. Most people do it the wrong way.

Check yourself. Make sure that you are not putting too much faith in an uncertain bonus.

When big is littie and little is big

2007-11-07T11:49:00Z

In my view there are two types of mistakes in your financial life. Big mistakes and little mistakes. And in order to cleanse yourself from financial distress, you must address both the big and the small. There are some really odd things you need to know before you can start preventing the mistakes. Let's take a look

The Big Stuff
Self-sabotage can come in many forms. The most obvious of these forms are big mistakes. What is a big mistake? A vacation you can't afford, furniture that you finance, buying a car when you are upside down on another car, buying a house when you haven't sold your other house, These are the massive mistakes that many people make. The strange thing is that these are the easiest mistakes to fix. All you have to do is focus on your end goal. You aren't going to buy a new couch if you are actually focusing on your financial future. Big mistakes happen when you purposefully ignore your financial situation. Frankly, it is really easy to stop making big mistakes.

The Small Stuff
If it doesn't sting when you hand someone your debit card or credit card, then you need to watch out for the small stuff. The small stuff is hard to spot, and it is hard to stop. The average person uses their debit card 5 times per day. That is way too much. When you make that many purchases, transactions don't feel real. Convenience is not benevolence. The small stuff problem is the hardest habit to kick. If you are use to eating lunch out every day, then you are going to have a hard time breaking that habit. If you order a bottle of wine every time you go to dinner, then you are going to have to stop that. Think of all the little things you do that hurt you financially. Ordering soda instead of water, buying DVDs instead of renting them, and having four pairs of brown dress boots are all things that will kill you slowly.

What now?
You must control the small stuff and the big stuff. You will most likely knockout the big stuff first. It is easy and tangible. That being said, I had a client last week that still has a problem with the big stuff, but completely has turned around their small stuff problem.

Figure out how much money you want to save this month, and then dig through your spending statements. The big stuff will jump out at you, but it is the small stuff that matters. Don't give up. You deserve better.

Campaign Finance

2007-11-06T14:10:00Z

A strangely refreshing choice

2007-11-02T13:06:00Z

Yesterday was a very long day. I had a number of appointments with a very diverse group of people. Despite my depletion of energy come day-end, I tend to enjoy very busy days. I love talking to people about their financial situations. I get to see how people deal with their personal financial struggles. Everybody has financial struggles. That is because struggle is a relative term. Some people struggle with a low-paying job, some struggle with not managing the income of a high-paying job, and some struggle with every decision they make.

One thing stuck out to me yesterday. That one thing: choice. Financial Planning 101 would tell you that when faced with a faced with a financial shortfall, you have the following options:
-increase your income with current job
-get an additional job
-spend less
-seek additional credit

Oddly enough 95% of Americans choose to seek additional credit (Sidenote about statistics: 80% of statistics are made up and the other 40% are inaccurate). Those who tend to improve their situation by increasing their incomes do it in the following ways. People with white-collar jobs tend to seek additional income opportunities within their current jobs, while blue-collar workers tend to get additional jobs. Yesterday was evidence of this. I met with a number of different couples both blue and white collar. They all had financial "issues". The interesting part was how they each dealt with their problems.

One of the people I met with has two full time jobs. He makes a great deal of money in both blue-collar jobs, but he needs that money to deal with his financial issues. He was working a ton, but he had a great attitude about his future. He chose to take the easy way out. And by easy, I mean hard. You see, ultimately the easiest thing to do is to work your butt off and have two jobs. The easy thing in the short term would been for him to go into more debt.

I don't think people think through their options thoroughly enough. So, today I would like to toast my guy from yesterday: you made the hard easy choice.

Quick non-financial advice

2007-11-02T10:11:00Z

Don't trust people who slow-dance to fast music, and don't trust people who fast-dance to slow music. You will thank me someday.

How much house?

2007-11-01T11:47:00Z

We are in one of the toughest housing crunches of all time. Many people can't afford the houses they live in, and they are having trouble selling the house that is breaking them. I believe that we brought this problem on ourselves by not understanding the basics of credit, but that is neither here nor there. Today I have two pieces of advice that should get your housing woes in check.

1. Don't be afraid to rent- Many of our housing woes stem from people that bought a home when they should have rented. Don't get me wrong, I think that it is important to build equity in your home, but don't ignore the other factors of home ownership. Many people believe that rent money is wasted, but I believe that it is simply is used to buy you time. You need to be fully prepared to own a home. Don't rush it.

2. The 30% rule- Do you know how you can pretty much guarantee that you will stay out of trouble? Make sure that your mortgage payment is no bigger than 30% of your monthly household income. Being above 30% can lead to real trouble. Many of the people who got burned by the housing crunch were way above 30%.

Stick to these easy tips and you should be just fine.

Blind Item
What kicker from an undefeated professional team that lives down the street from PTP had a full house on Halloween? Pete the Planner's spys (okay, Pete the Planner) noticed that there was a line about 75 deep at the door of this future hall of fame kicker. I guess kids just wanted to see what type of candy this superstar gave out. I will kick you a hint. His name rhymes with Vladam Menitieri.

It all comes back to Christopher Wallace

2007-10-31T12:16:00Z

I had a meeting with a very young couple yesterday. They are in a great financial position. They are able to live on one of their salaries and use the other salary to accomplish some financial goals. Their incomes are not massive by any means. In fact, I would call them modest. But, when it comes to financial acumen, they are very well-off. I was just finishing their meeting when the 21 year old bride says to me. " I am quite happy with the amount of money we make. Besides, you know what they say? The more money you come across, the more problems you see."

It was a surreal moment. I felt like I was in an episode of the Happy Days, and the Fonz punched the Jukebox to make it stop playing. Pop culture had finally caught up with the financial world. This young innocent bride had just recited a Notorious B.I.G. lyric back to me. Ignore the fact that the saying is pretty accurate. This was a monumental moment in the history of financial planning. A rap lyric was used on me to explain a financial situation. The funny part was when I asked her if she knew that she just recited a "Biggie Smalls" lyric. She said, "no, whose that?"

After 10 years in the business, I will tell you that the more money you come across the more problems you will see. It has a lot to do with financial decision making. The more money that you have, the more financial decisions you will have; thus you have an opportunity to make more poor decisions, which lead to problems. Therefore, Notorious B.I.G. is right. The more money you come across, the more problems you see.

How do you combat this? Work on your financial habits when you are young and broke. If you are saving 15% of a small salary, then you will have no problem saving 15% of a big salary.

R.I.P B.I.G.

Squirrel you know it's true

2007-10-30T18:21:00Z

This is a picture of a squirrel that I saw in Philly. I named him Snuggles. He was aggressive. I have no point.

...anyway. My video blog this morning addressed risk. Let's continue that converstaion. I believe that the majority of poor investment decisions come from a misunderstanding of risk. Risk, is often confused with the more specific "market risk". Although "market risk" is, itself, misunderstood, I believe that the other types of risk are what get people in to trouble.

Put on your finance hats, boys and girls. Because heeeeeeeere we go. Market risk is the chance that an investment will decline in value due to a general decline in the financial markets. This is the most misused type of risk. I believe that younger generations don't properly assess the market risk in their portfolio. A long(er) investment time horizon can help balance out market risk, but, generally speaking, you shouldn't risk your entire portfolio for absurd returns. Now, I can't and I won't give you specific investment advice in this forum, but risking a -40% downside to achive a +40% upside is never prudent. Like I mentioned, a long term time horizion will help the returns level out, but usually people lose money and then bail (locking in their losses).

The worst thing that I generally see is when a person close to retirement discovers that they may come up short of their retirement goal. The person is then faced with a very tough decision. They can get more aggessive with their retirement investment, they can invest more money, they can delay their retirement date, or they can reduce their retirement lifestyle goal. People, when acting alone without good financial advice, usually choose to get more aggressive. They then have a great deal of market risk. They focus on the potential for a +30% gain, but they forget that a -30% loss will set their retirement back for years to come.

What are the other types of risk that people forget about? Liquidity risk, credit risk, interest rate risk, inflation risk, currency risk, opportunity risk, income risk, prepayment risk, unsystematic risk, call risk.......do you get my point?
People mismanage their market risk, while all of these other risks systematically eat away at their portfolios. My advice is to take it easy when it comes to market risk. Your portfolio isn't invincible, but there is good news. McRib is back! I can't believe that the McRib use to be my favorite thing in the world back in 1990. Coronary risk.

Whipper-snappers don't understand risk

2007-10-30T13:22:00Z

Letters from Wharton: Micro Addition

2007-10-26T11:02:00Z

I don't have much time this morning. This is going to be quick.
Things I learned yesterday.

-In dealing with investment decisions: the pain of an investment loss is 2.5 times greater than the exuberance that can come with an investment gain.
-People act on their investments more when they are angry, opposed to fearful.

Important points of note.
-During snack time, I ate a granola bar (called a Luna bar) that is especially made for women. They didn't have anything healthy at the table other than that bar. How can food be designed for a specific gender. I have been paranoid all day that my Adam's apple is shrinking. I freaked myself out last night because I asked someone for directions. This is not good
-Why is Steve short for Stephen? Shouldn't it be Stephe? Stephen doesn't have a "V"; therefore he should only be able to work with what he's got. I think that it is unfair to use other letters when forming a nickname. I think it is an affront to the alphabet.

Talk to you later. One more day class.

Letters from Wharton

2007-10-25T11:21:00Z

Hi Kids! I am in the land of Academia this week. Wow! I forgot what it was like. I would have felt more comfortable if I would have shown up wearing sweat pants to the first lecture. I was hoping the guy in class next to me would smell like stale beer so that I would feel like I was back at my own college. He didn't

I have decided to break down this entry into two sections. Things that matter and things that really matter.

Things that matter:
- My first day classes were: a discussion on Modern Portfolio Theory, a lecture on Risk Adjusted Performance Measures, and unbelievable lecture on Hedge Funds.
-I learned, from an academic perspective, that our world's best academic minds think that the stock market will only make modest gains over the next several years.
-I learned that people often invest poorly when they are trying to be conservative. It is a FACT that a portfolio 25% stocks and 75% bonds actually is safer than a portfolio with 100% bonds. That blew my mind. I could explain it to you, but I won't. But I could.
-I learned that Hedge Funds, on a conceptual level, are much safer (from a risk management perspective) than people think. The problem is knowing what fund to get into. Most hedge funds require that you are an accredited investor ($250k annual income or $1 million net worth).

Things that really matter
-I am not the type of guy that would bash Northwest Airlines in this public forum for canceling my original flight, rerouting me through Detroit, delaying my second flight, putting me in a 2 hour holding pattern over western Pennsylvania, and ultimately making my 2 hour flight, a 7 hour nightmare.
-We all have name badges. One guy's name badge says Big Jon Smith. I introduced myself to him, and said "Hi Jon. I'm Peter." He said, "It's Big Jon." I said, "Excuse me?" He said, "It's Big Jon. Everybody calls me Big Jon. I was born big, and you see how big I am now, so call me Big Jon."
That officially is the most ridiculous thing I have ever heard. I now have to call people a name that includes the most descriptive adjective for them. Big Jon? Are you kidding me? Is that the way he justifies his health? By just making it part of his identity? I have nothing against his size, but I think that it is really sad that he has to be reminded of his size every time someone calls his name. Not to mention that I am stuck calling a man "Big Jon" at one of the finest academic institutions in the world. Later that night I met "Smelly Larry", "Tall Debbie", and "Skin-Condition Steve".
-There are always a couple of guys that try to upstage the lecturer. They often do it by using the wrong terminology, and they end up just looking like morons. I wanted to get "Big Jon" to beat them up.
-I wore a sweater vest. It seemed like the right thing to do at an Ivy School.
-I haven't had a cheesesteak yet. Yet!

I will have more for you tomorrow.

STOP

2007-10-23T11:01:00Z

6.6 percent again? Stop. There was a report yesterday that college cost increased 6.6 percent...again. I have previously taken such news quite clinically. It was just a number. But for some reason I am fired up this year. I say this on the heels of my trip to Wharton, but what is the academic world trying to improve. How could something cost 6.6% more? I would understand an increase that mirrored inflation.

This problem of ridiculous increases is real. Kids are leaving college with more student loan debt than ever before. This is debt that they can't remove themselves of for about 20 years. Is someone profiting on the other side? I don't know. I wish I knew. I think that a college education will eventually become devalued. People will find alternatives for their education. Internet classes, commuter classes, and technical school will become a welcomed alternative.

How is it not price gouging?

Pete is still alive

2007-10-22T12:43:00Z

As you know, I ran a half marathon this past weekend with Mrs. Planner and some friends. There is a lot to be learned about yourself when you run that far. You have a tremendous amount of time to think about failing or succeeding. I, of course, started thinking about how running relates to money. Here is what I came up with.

-If planning your financial future was only 1:45 of torture and then you would be set for life, people would still give up or not even start.
-When you hit the halfway mark in the race you can either say, "Oh, no. I'm only half way." Or you can say "Yes! I am already half way"
-Running has no gender bounds.
-There is always some guy running in a costume. (This has nothing to do with money).
-3 Blackhawk helicopters flew over the start, and couldn't stop thinking how many tax dollars went to pay for it.
-Some people get to the end of their journey (running or retirement) and they look relaxed (like my friend J.O.), or they look like they have 10 seconds to live (like the guy covered in drool that I passed near the finish....what? Did you think I was going to stop and wipe his drool?)

Anyway, we had a great time. All four of us go personal bests.
-Mrs. Planner got 16th overall for the woman.
-Lucas ran the marathon and got 11th, and qualified for Boston
-J.O. ran a personal best, and didn't sweat.
-I passed a guy that was drooling near the finish, and bested my previous time by 45 minutes. I guess I didn't need that extra 50 pounds I had been carrying.

Go Colts

5 huge 401k mistakes

2007-10-19T12:55:00Z

Here are five deadly moves that people should never make when dealing with their 401k.

1. Waiting to contribute until the time seems right. The time will never seem right. You need to get in the game ASAP. As soon as you are eligible, sign up. Don't wait a month. Don't wait a week. In fact, exit this blog entry and sign up now if you haven't already done so.

2. Chasing returns. It is a bad way to invest. Don't just invest in what performed best in the previous quarter because many times those investments have seen their good fortune end. If you are buying what is doing the best, then you are usually buying high. Buying high is not good.

3. Borrowing against your 401k. Your 401k is supposed to provide for you from age 59 1/2 until you die. So let's say that you die when you are 90. That is 30 1/2 years. You have a limited amount of time to put money into your retirement account. Don't use the money prior to 59 1/2. Chances are that the reason that you took the loan is lame anyway.

4. Wasting the match. If your company matches, then make sure that you are contributing enough to get the full match. It is free money. Although Cal Ewing, the Patron Saint of High School Economics, once said, "there is no such thing as a free lunch", there is such a thing as free 401k money.

5. Being too aggressive. Slow down. Breathe. Stop putting 100% of your money into high risk investments. It is not worth the risk. If you want to make your account grow faster, then contribute more. Don't depend on high risk funds to get you to the finish line.

Mrs. Planner and I are running a half marathon on Sunday. If there is no blog on Monday, then that means that I am still running. Let's just hope that Mrs. Planner doesn't beat me as bad as she did last time.

An odd combination

2007-10-17T19:55:00Z

What do you get when you cross one of the world's best business schools with a smart aleck financial blogger. Well, you get Pete at Wharton Business School's Executive Education Program. I will be there next week, so the blog might either be awesome or sparse. I will just keep you guessing. I will come back smart.

Social Security and lockboxes

2007-10-17T15:46:00Z

"I can't finance my retirement"

2007-10-17T13:35:00Z

Some of the best stuff I hear comes from interaction with my clients. I was talking with a thirtysomething couple last night and the husband says, "I know that I have to save for college and for my retirement, but I figure that a college education can be financed (if it had to be), while I can't finance my retirement."

It's hard to disagree with that. We went on to talk about how many times financial decisions appear to be either/or type decisions, but with the right amount of discipline they can turn into both/and decisions. My client is right though. You can't finance retirement without getting into really big trouble.

Feeling gassy

2007-10-16T11:59:00Z

Gas prices are spiking again, which always leads to one of my favorite pastimes: people complaining about the price of gas. I am convinced that the complaining that occurs has very little to do with the actual price of gas. Here is why. Let's say that gas prices increase $.10 per gallon. And let's say that you have a 17 gallon tank. Then, let's say that you fill up your tank 4 times per month. Are you still with me? I hope so. Anyway, the $.10 increase in gas prices just affected you by $6.80 per month. Why do people complain about that? I was laying down watching football last night and $6.80 fell out of my pocket into my couch cushions.

I believe that people actually sense their addiction and dependence. Clearly $6.80 isn't going to affect the average Joe. And don't give me the "elderly person on fixed income" excuse. I am talking about all the people that you and I interact with on a regular basis. They can afford another $6.80 per month. People actually realize that, currently, gas is our only option. Ethanol is getting more popular, but that involves buying a new car, and never traveling too far away from an ethanol pump. I do believe ethanol is a solution for the problem, but there aren't enough pumps. And who wants to buy a new car?

My point? Yes, I have a point. People complain about gas prices because they don't know what to do about the problem. $6.80 is not a big deal. All that you would have to do to absorb it into your budget is take your lunch to work one extra day. May I suggest that you take beans?

Disclaimer ****I am not trying to piggy back off of Al Gore's Nobel Peace Prize. In fact, if I won a Nobel Peace Prize, they should just get rid of the award.

Unexpected Vacation

2007-10-15T11:45:00Z

Sorry for the lack of content this past week. I was without internet access, and a blog requires that. I will hopefully be back at full force tomorrow morning. Thanks for your patience.

Pete the Plannerism for October

2007-10-10T01:37:00Z

A free T-shirt at a credit card signup station is not actually free unless you write down fake information on the application.

Worth Your Weight

2007-10-05T13:47:00Z

Conflict: Part 2

2007-10-04T23:45:00Z

Man vs Man

This is the second entry to our six part series on conflict. We are exploring the different types of money conflict that affect our lives.

Man, by his nature, is competitive. If you don't believe me, then you could just ask the unfittest (if they were still alive). [Nothing like a little Darwin humor to set the tone for a money blog.] Therefore, we tend to think that our financial downfalls are the results of someone else's victory. That generally isn't the case. For example: if you don't make enough money at work, that doesn't mean that your boss makes too much. People tend to compete against the wrong entity in the wrong scenario. There are very few scenarios that truly express the economic struggle of man vs man. For instance, most negotiations are man vs man. Whereas, most stock trades are actually man vs institution (Most people are mislead to believe that their poor stock picks are exploited by some other smarter individual. That's not true. When you lose in the stock market, you lose to institutions.)

The fact of the matter is that there are very few man vs man money conflicts. Many times people misdiagnose man vs himself conflicts for man vs man conflicts. Your perception that you are in conflict for money with another individual is just mental garbage. These feelings are usually driven by an internal struggle. The most common man vs man financial conflicts exist when one party displays poor ethics. Such as a poor used car deal, or a ponzi scheme.

The bottom line: man vs man money conflicts are rare. It generally is confused with man vs himself conflicts. The most common barely clothed man vs man conflict is sumo wrestling.

Be sure to check out yesterday's news clip.

Pete the Planner discusses common financial mistakes

2007-10-04T20:19:00Z

Here is the clip from my appearance on the WISH-TV Noon News. Enjoy

Conflict

2007-10-03T01:47:00Z

As you know, Mrs Planner is a teacher of literature, therefore this post is to prove to her that I have a true appreciation for the lessons that literature lends us. For instance, in a narrative there are 5 traditional types of conflict and one more modern conflict. These types of conflict serve to tell a story, generally that involves the protagonist's search for redemption.

The types of conflict are:
-man vs himself
-man vs man
-man vs society
-man vs nature
-man vs God
-man vs machine

"What in the world does this have to do with money?" you ponder.
"Everything", I say with a besmirched grin. (Anytime you can use the word besmirched, I suggest you do it)
You see these are the same conflicts that affect our money lives. Over the next few days, I will take each one of these conflicts and discuss it as it relates to your money life. It will not only serve to make you smarter, but it will score massive brownie points with Mrs Planner. Although the second reason seems self-serving, it isn't. It is verrrrry self-serving.

Man vs Himself

There is a term for beings without internal conflict, they are called Aliens. Man, by his nature, struggles with his inner thoughts (I am using the masculine pronoun out of ease of use. Cut me some slack, Gloria Steinem.) That is what makes life interesting. You could be in the woods by yourself, yet your inner struggles would be enough to keep you occupied. Just ask Henry David Thoreau. Every time that you dream about winning the lottery, every time you think about buying a gift you can't afford, and every time you sit on your hands as you watch the church collection plate float by, you are actually conflicted with yourself. This a good thing, especially when it comes to money. If you didn't challenge some of your crazy impulsive thoughts then you would end up with things like a Big Mouth Billy Bass. If one of the main attributes of literary conflict is an ennobling journey, then these little money meetings of your mind are not only good, but they are a spontaneous display of discipline and mastery.

The bottom line: continue to argue with yourself, but make sure you win. Your financial life is way to important. Stick up for your future. Oh, and one more thing. Don't have these conversations with yourself out loud. The canvas jacket with the arms crossed up will be headed your way. As we explore the other conflicts, I think you will quickly realize that "man vs himself" is the only conflict where "man" retains a sense of control. You can't do anything about another man, society, nature, God, or machine. You can work on the skills that will allow you to be armed when the battle in your brain begins.