Million Dollar Plan

A few weeks back, we introduced a special edition of The Million Dollar Plan, called “Pete’s Potpourri.”  We talked a little bit about this and a little bit of that. Some might say, a bit of a “potpourri” episode, if you will. After almost 13 weeks of traveling, countless emails, and multiple ideas, this week we brought back: Pete’s Potpourri, pt. 2. My inbox always has an interesting mix to the emails that come through. Some, make me laugh. Others, compel me to share. In this week’s episode a few of the emails featured I hand picked, others I read for the first time, in real time, with you. So sit back, and enjoy our special edition of The Million Dollar Plan, Pete’s Potpourri, pt. 2. Have a question or comment for me?  Hit me up at askpete@petetheplanner.com. You never know, your question/comment might get featured in a blog or podcast post.

Meet, Wayne. Wayne’s main concerns, in his own words: “My government job is stressful, I feel burned-out, and I need a change. When I turn 57 in 4 months, I’m eligible to retire from a with a monthly pension of $5,850 and I have tax deferred savings in a 457 plan of $450,000. My gross annual salary is currently $105,000. Can I afford to comfortably retire and maintain my lifestyle, plus handle some additional expenses to fund travel and hobbies? Or should I continue to work for a few more years doing something less stressful (maybe part-time and lower paying) to add to a Roth IRA and delay taking 457 plan withdrawals? I have 5 years left to pay on my mortgage with a 2.35% interest rate of $1,000 a month. Other than $6,000 in consumer debt that I’m working to pay off, that’s my only debt.”

This week, we’re talking about wake-up calls. Whether it’s your health, your relationships or your finances–you are well aware if a certain component of your life is not where it needs to be.  You don’t have to receive an ominous voicemail, while traveling on business, from your doctor after a recent wellness check-up to shed light on your wellness opportunities. Just as you don’t need a break-up or an over-draft fee notification to know some areas of your life needs a little attention. “Wake-up calls” can come in a variety of forms. But, if you got one…would you answer it? If you keep ignoring the warning signs, stop. Answer your wake-up call. In order to see change, you have to decide to do so–now. If you keep silencing the signs, before too long, it’ll be too late. Don’t let your current opportunities get to the point of irreversible change. Our goal is to make tomorrow easier. If a wake-up call is what it takes, answer it. Make a change today, the hardest part is starting. But once you’ve started, put one foot in front of the other and keep going. Your future self will thank you for taking that first step.  

Meet, Olivia. Olivia’s main concerns, in her own words: “I wasn’t a credit wizard in my early 20’s and early 30’s. It took a lot of hard knocks to show me the light. Now I have seen said light, and I need help to get my financial life on track. Through the follies and a few instances out of my control, I have a defaulted student loan that I make regular payments on (this is a somewhat long story), a 100% payment record on my credit report, and a lofty goal to save or borrow $30,000 in order to pay for IVF treatment in the next 5 months. No big deal right? I work for for a not-for-profit, drive for uber, and am doing everything humanely possible to pay down my debt quickly to raise my credit score in a somewhat reasonable amount of time. The student loan is the thing that kills me. I borrowed 24K which has now turned into 40K due to interest and penalties. I defaulted once due to my own stupidity. I rehabilitated the loan with the creditor assigned to my loan. I then set up automated payments for all future payments. One day I received a call that my loan had defaulted again, because I did not call in after 18 months to reaffirm the withdrawals from my account. As I have already rehabilitated I am lost at what I can do. This is the true anchor of what is keeping my credit score down, and possibly keeping me from funding my IVF treatment.”

Meet Wendy. Wendy’s main concerns, in her own words:  If we were to stay in the Midwest in our current jobs, I wouldn’t be worried about our financial future at all. However, my husband, who is active duty military, is going to separate soon and we plan to move back to southern CA where both of our families live. We’ve both been applying to jobs for the past year. He is currently on the short list for two positions & seems confident that he will get at least one of them; I’m still applying and interviewing. We aren’t going to move until at least one of us has a job, so I think our worst case scenario is that we move when (if) he gets one of these jobs, which we estimate will pay him $130,000/yr. Here are some of my biggest concerns with that scenario: SoCal costs of living are not what we’re accustom to. If we scale back on our retirement savings and continue living frugally, we can make it on that salary, but it would require that we scale back on our retirement/investment savings, which is very scary for me. I’ve been researching housing options, and I think buying a house might be the cheapest option for us. We have access to the VA loan up to a home worth $625,000. We would like to buy a house for less than that amount both so that we don’t have to take on two mortgages and because a house worth more will require a higher monthly payment than I’m comfortable with. The VA loan doesn’t require a down payment, but we plan on putting down 10% to reduce the funding fee. I’m hoping to land a job not too long after we get there, but I really have no idea how long this job search will last for me. To that end, I am lining up contract/freelance work for when we move, but I’m not factoring that into my projections because I have no idea how much that will bring in or how consistent it will be.  

This week, I welcome back my friend Paul Ashley from First Person Advisors. Paul has been featured on my show two times prior to this week’s episode, and you can find both by clicking here and here. *clicky, clicky* There have been numerous developments in the world of healthcare this week. Right now, there are a lot of unknowns and a lot of what-if’s. Bernie Sanders proposed his bill, “Medicare For All,” in attempt to push for single-payer healthcare. The proposed single-payer health care plan (that would be phased over time) suggests generous coverage, going beyond what Medicare currently covers. As of right now payment is unclear and it’s hard to say whether “Medicare For All,” would increase or decrease health care coverage costs. Sen. Sanders’s legislation would attempt to decrease the number of those uninsured and tackle out-of-pocket spending. With many moving parts, I don’t know anyone better than Paul to help me cut through the static. Over the course of this episode Paul and I are going to cover the overall proposed legislation of “Medicare For All,” what changes to expect from single-payer healthcare and the effects these changes could have on your over healthcare coverage/expenses. Cheers!

Meet Cassie. Cassie’s main concerns, in her own words: I find managing money difficult, but over the past several years I’ve educated myself on financial responsibility and budgeting. I am quite proud of what I have accomplished–curbed my unnecessary spending tremendously; started an emergency fund; actively paying off debt; and saving for retirement. However, I am still plagued with worry and financial insecurity. I never seem to have enough, and I don’t like living in a spirit of lack. I know I am an under-earner (working for a non-profit), and my husband is self-employed which means some months he doesn’t take home much of a salary. We have been economically vulnerable for nearly 25 years. I want to be more secure financially, grateful for what I have and at peace with what I don’t.

Meet Maybel. Maybel’s main concerns, in her own words: I am not sure WHAT to do next, or how to go about it.  When I left my previous employer, I became a contract worker and stopped contributing to retirement to build the reserves back up that were taken with purchase of the new house/repairs. Due to expenses, I have not restarted contributing. Although I don’t anticipate my work coming to an end, we are prepared for that possibility. We are fully capable of living lean and are used to it, but we also want to enjoy some of the fruits of our labor. I love having paid for stuff and not accumulating debt so paying off the $90,000 left on our mortgage is super appealing (but not if it is not the best way to make the most of our money.) Our typical way of doing things is making a list and doing them one thing at a time. Needs first over wants. We just keep things on the frugal end wherever we can.  The goal would be to sell this current home in 5 years, leave the state and purchase a multifamily.

In a special early week edition we’re focusing on how our data is handled, specifically with the credit data bureaus. In early September of 2017, one of the big three credit bureaus (Equifax) had a data breach causing potential reproductions for countless people across the nation. If you haven’t already, click here to link to the webpage to check and see if your data was compromised. Mine, unfortunately was. However why am I more worked up about other people’s data being breached? Because my credit is frozen. Freezing credit is a very financially healthy and normal process that won’t affect your daily life in a negative way. When you freeze your credit it simply prevents others from accessing your credit for the purpose of opening new credit lines. If you were to freeze your credit today, go shopping, and then try to open a store credit card, then it would be declined immediately. However, when you freeze your credit it’s not forever. With a user name and pin you can go in and temporarily lift your credit freeze, have the needed credit checks run, and refreeze your credit once all is said and done. Through the course of this episode we’re going to go over how a data breach happens, what steps there are to prevent your information being compromised and we’re going to get to know the three big credit bureaus. My producer Nicole and I walked step-by-step through how to freeze her credit and I want to do the same with you. Click here for a complete start to finish guide on how to freeze your credit. Take 15 minutes to freeze your credit right now.    

Meet Autumn. Autumn’s main concerns, in her own words: We have roughly $1500-1700/mo in extra income and we would like to know how we should allocate this money. We have ideas of contributing more to my HSA, start ROTH’s, contribute to our children’s 529 accts regularly, but also know we need to increase our emergency fund. Should be build up our savings and THEN attack some of the other things mentioned, and if so, in what order? Also would like to know the best way to save for college for 4 kids (age 9, 8, 7, 3) and if it’s realistic to put them through school without loans? I stayed at home for 9 years and have worked part time for the past year (non-benefitted) and just switched to full time with benefits last month. My husband just got a pay raise effective this month and just started going to college in May, which has us earning extra income from the VA. So, lots of brand new income for us and we want to make the best decisions with it! Also something to know is that my husband has a VA disability rating and will start collecting that in 3 years, which will be an additional $1300/mo approximately. Our goal is to move to a bigger home around that time frame as well. So some of that may going towards increasing mortgage but we would also love suggestions on the best use of that money when we start collecting it.

Ep. 185: Sharing finances with your special someone

Ep. 184: Rubin, a business owner focused on saving for the future.

Ep. 183: Red, a state worker & wanna be salesman.

Ep. 182: Signs of a Chaotic Financial Life

Ep. 181: Brielle has a lot of moving pieces & is ready to put them into place.