September 26, 2024 • 37 mins
On this edition of Ask KT and Suze Anything, Suze answers questions about term insurance policies, IRA rollovers, and interest rates. Plus, a quizzie about selling a home with no mortgage to buy a fancy new apartment and more!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Suze (00:46):
September 26th, 2024. Welcome everybody to the Women and Money podcast.
As well as everybody smart enough to listen. This is
the KT and Suze episode.
KT (00:58):
Ask us anything. I'm a little jet lag. Still.
Suze (01:02):
You're a little something this morning.
KT (01:04):
You keep waking up at 330 in the morning. So
we got back from Spain. We had a great time. Everyone.
We both gained three pounds each
Suze (01:15):
and now we're in the end of September, which is
also a big birthday month. We have lots of birthdays
this month.
KT (01:21):
So everybody who has a birthday this month, we wish
you a happy, happy birthday.
Suze (01:27):
And what else do you want to tell them anything
about Spain?
KT (01:30):
Yeah, we loved visiting with Mel. We loved seeing Sammy
in the hometown she grew up in. I just have
to tell you this. It was spectacular.
Suze (01:39):
So we've been friends with Sammy and her mother Lithia
now for 10 years because it was in 2015 that
the first time KT and I walked the Camino,
it was Marley Camino, which is Lithia's company that hosted us.
And since then, we have become such close friends. I
(02:01):
can't tell you.
KT (02:02):
We did two more caminos thereafter.
Suze (02:05):
So however, but I just have to tell this story.
So they've always told us, Sammy, her daughter who's just stunning,
by the way,
always told us about how she was raised. She grew
up in Majorca in her grandma's home, grandma. And we
pictured this home that she described on a cliff overlooking
the Mediterranean, kind of like really elegant in its own
(02:27):
way or that's how I pictured it. And
we finally went and visited her there.
KT (02:33):
It was on a cliff. It was a 300 year
old home that her great, great, great grandmother and grandfather
actually built. It had a well
that you would get water from and it was everything
and more that we envisioned.
Suze (02:52):
And nothing had been changed over all these years,
KT (02:57):
Including the wait, including the little itty bitty tiny bed
that she had in her bedroom with her brother. These
two little skinny wooden beds and Sammy's like, you know,
5 ft seven or eight. And she's gorgeous. And here
she was in, I should post a picture of her
sitting on the edge of this little bed that she
(03:18):
grew up in as a child.
The same sheets, kind of same Snoopy sheets sheets.
Suze (03:24):
But anyway, fabulous. So fabulous. Anyway, we're glad to be
home and it was a great adventure for you.
KT (03:33):
Can't wait to go back to Spain. We just love
it there.
Suze (03:36):
So, KT, before we begin, where you're asking me questions
is I want you all to know if you don't
already know that Alliant Credit Union while we were gone
did have a rate decrease on their one year CD.
And it's now 4.60 for amounts under $75,000 and 4.65
(04:01):
for amounts of $75,000 or more. If you compare that,
by the way to the one year treasury, which is
currently at about 3.92 depending on the state that you
live in and your income tax bracket. That's still a great,
great deal. Also, I just wanna say, remember
(04:22):
that the 12 month CD at Alliant Credit Union is
good for anywhere from 12 to 17 months and 30 days.
You choose your maturity, you have to talk to them
to make sure that you're able to do that. So
if you compare that and you get it for 17
(04:42):
months and 30 days, now we're talking because the two
year treasury is at 3.5% right now, right around there.
So you should still go to my alliant.com. If you
want to lock in a good rate for that period
of time, I would take advantage of it if I
were you? What do you got for me, KT?
KT (05:03):
My first question, Suze is from Scott.
Suze (05:07):
Scott.
KT (05:08):
He said, Suze and KT when my dad passed away,
my mom put their home into a Tod to my
two sisters. And I, so that's a TOD KT.
Suze (05:19):
Tell everyone...
KT (05:19):
It's transfer on death account.
Suze (05:21):
Ding, ding, ding, ding, ding, ding, ding, ding, ding, ding,
KT (05:24):
Listen to this everyone. So Scott's oldest sister said to
him privately. I don't want anything to do with this house.
Pay me my third. The home in question is a
lake home with an assessed value exceeding $750,000. And, and
this is a little bit interesting. He said, Suze, I
(05:45):
feel immoral asking but can I open a term life
policy for my mom
so I can cover the cost to buy out my sisters?
I don't think that's immoral. So anyway, that's his question.
Suze (05:59):
Scott, here's what I would tell you. Now, it's not
an immoral question, but I'm not sure it solves your problem.
And let me tell you why a term life insurance
policy is only good for a specific term.
So let's say, I don't know how old you are
right now, but let's say your mother is older. Let's
(06:20):
say she's in her seventies and maybe she's gonna live
to her nineties, possibly even 100.
There's no way that a term policy at this point
in time, if that's how old she is, is going
to be cost effective. You may find that you pay
more in premiums over a long period of time
(06:41):
than you do if you were just to save that money,
possibly to have the money to buy out your sister
at the time. So I don't think a term policy
is the way to go. Remember, term life insurance is
meant to only be there during
younger years before you've had time to accumulate assets and
(07:03):
it allows you to do so at a very cost
effective rate, it's not meant to be your whole life.
So if I were you, that isn't how I would
solve this problem. I mean, I could go on and
on about ways that you could solve it, but that
wasn't your question to me. So, no, I don't think
your term life insurance policy will do it. I just don't.
(07:25):
All right.
KT (07:27):
So Suze, the next question is from um a listener
that said, I just got my must have documents and
started filling them out. It's a little surreal thinking about passing.
I read that I may wanna make my trust the
beneficiary for all of my bank
and retirement accounts. Is this accurate or would it be
(07:48):
better to make some or all of them POD provided?
I have no debt or expenses after death?
Suze (07:55):
So here's my question, KT, does he say or she
say
how old they are? Do, do they say if they're
married anything?
KT (08:04):
No, but they're just filling them out for the first time.
Suze (08:07):
So here's what I want everybody to know about. The
must have documents and what are the must have documents.
They are a living revocable trust,
advance directive and durable power of attorney for health care,
a will and a financial power of attorney. Those are
four documents that you must have. And if you want
(08:29):
those by the way, go to must have docs.com and
take a look because that's where you can get them.
What you have to understand is if you are married,
you never ever, ever want the trust to be the
beneficiary of any retirement account or any HSA account. Let's
(08:49):
be clear on that. So when this person says that
it should be my beneficiary for all my bank and
retirement accounts, not if you are married
again, I am underlining this. You do not want your
trust account to be the primary beneficiary if you are
married of any retirement accounts and or an HSA insurance account.
(09:12):
So here's what you all need to know as well. Sure,
you can make your accounts and everything pay on death.
But as I've said, many times, what if you don't die?
What if you become incapacitated,
then the pay on death account isn't going to help
you who's going to be able to access that money
(09:33):
if you need it. A living trust with an incapacity
clause in it, which the must have documents have is
the way to go bar. None. Just telling you you
want to avoid problems. Get the must have documents. All right, KT.
KT (09:49):
So the, the next questions from Nicole...
Suze (09:51):
Doesn't my voice sound deep today?
KT (09:53):
It sounds better. Yeah, it was a little bit hoarse
yesterday. So I'm glad today it's smoother.
Suze (10:00):
Tell them how I ran.
KT (10:01):
Oh my God, Suze. And I had a connection from
Majorca to Madrid. Madrid, Miami and the connection in Madrid
was less than 45 minutes. The plane got there a
little bit late but still.
So they changed the gate as soon as we comfortably
arrived to it, to the other side of the airport
with a train with a quarter of a mile of
(10:24):
walking and with all those floor escalators for another half
a mile. Suze was the marathon woman. Unbelievable. And we
were the last people there as their
Suze (10:36):
They held it.
KT (10:38):
Yeah, they held the plane and I said, please, please,
we need to make this flight and she looked at me.
She said, oh, Senora, follow me and we ran and
Suze was running like a bunny. Never saw her. I
never saw you run like that in the 24 years
we've been together.
Suze (10:55):
Because the thought of missing that flight
was more than I could deal with. All right, go on.
KT (11:01):
My next question is from Nicole. She says, hi KT.
She wrote it to me. Do you know when Fitz
will have a plan to advise us. So Fitz is
Keith Fitzgerald everyone.
And she said, I've been waiting ever since Suze mentioned
that possibility. Money market is still good, but I have
a feeling it will tumble next week. I can't wait
(11:23):
for your answer. So I'm not gonna answer it, Suze.
You tell Nicole.
Suze (11:28):
So first of all Nicole money market rates are not
going to tumble next week. So don't freak out about that. Now,
hundreds of you are writing and asking that question. So
what did I do? I sent them all to Keith
and said, what do you want me to tell people, Keith?
This is in your hands. This is your brilliant brainchild
(11:50):
of how it works. And here is what he wrote
the back. He said, tell them that we're down to
brass tacks and on the home stretch, we are quadruple
checking the math to be sure it's right.
We need to make sure that every research point is
backed up quantitatively and we are doing a final review
(12:14):
legally to ensure the appropriate protections are in place and
that the language is sufficient to clearly delineate what's happening
and the boundaries associated with users who sign up. I
am quoting
Mr Keith Fitzgerald there. So I'm bugging him. KT is
(12:34):
bugging him, right? Everybody's bugging him, but he is a
man of perfection. And until he knows that every single
thing works the way it's supposed to, it's not gonna happen.
But I do think it is probable that in October
you may see it
(12:56):
and if not October, I would almost say for sure,
by November, almost for sure, but we'll see what happens.
All right.
KT (13:03):
Next is from Teresa or Teresa...
Suze (13:06):
Wait... I have to say, right. And partly it's my
fault because when Keith talks to me about it, everybody
I keep saying.
But what if, but what if they want to do this?
What if that, so he has to keep going back
and redoing the math and everything to make sure that
every single one of you will be taken care of.
All right, go on.
KT (13:25):
OK. This, this is my favorite kind of question. Everyone
from Teresa.
You ladies rock. I heard I can do a one
time rollover from a traditional IRA to my HSA account
tax free if so how?
Suze (13:42):
You are absolutely right, My dear Teresa. One time
and one time only if you wanna use the money
in an IRA, a traditional IRA. So you've never paid
taxes on it or even a pretext, IRA rollover that
you may have, you can take that money and use
it to fund
(14:03):
up to the max if you want of the HSA
that you have and it is absolutely tax free. So
if you want to know how to do it in
your particular company, I would ask your HR person how
to do it. All right.
KT (14:19):
OK. So on the theme of 401ks, this is from Jenny.
My employer is being bought by another company. I have
a 401k with Fidelity. They're switching to a 403 B
with Empowered. I think that was formally prudential. Should I
roll over or start a new retirement account? I don't
(14:39):
know much about 403bs. Thank you. A
Suze (14:42):
403 B works essentially the same way as a 401k, really...
That's what you need to know. However, if it were
me
and I had a 401k with Fidelity and now they're
switching it to a 403b within power. What I want
you to think about, however, is if you did an
(15:05):
IRA rollover with the 401k that you have at Fidelity
and start a new retirement account there, you also have
the ability if you want to start converting to a
Roth IRA and your investment options will be far grander
than any 403b with E hat they'll offer you. But
(15:25):
if you make a lot of money
and you want to do a backdoor Roth IRA one day,
if you have a traditional IRA that you rolled over
and you're not gonna be able to do a backdoor Roth.
So therefore you might just wanna leave it with the
403b with Empower just depends how much money you make
(15:47):
a year, how much money you think you're gonna make
in the future. And if you like the investment options
and the fees that empower is going to charge you
other than, and, and actually the amount of money that
you have in there because if there isn't a lot
of money in there, then, oh, you bet I would
do an IRA rollover and then convert it to a
(16:09):
Roth IRA. All right.
KT (16:11):
Next question, Suze is from JJ. I've rolled over a
401k to an IRA and the money is now sitting
in cash instead of the old mutual funds since they
were unavailable in the IRA. With it being several $100,000...
our listeners are getting so rich. It's not even
(16:33):
$100,000. Is it better to quickly reinvest it all or
try to do dollar cost averaging dollar cost. Averaging was
several $100,000. I, I mean, I'm shocked. Go ahead.
Suze (16:48):
What are you shocked about?
KT (16:49):
The amount of money all these questions I'm getting there.
They are getting wealthier and...
Suze (16:54):
That's happens when you listen to me for the past 20 years.
And for those of you who are new to this podcast,
you can also watch the Suze Orman show that all
of these people most likely watched before the podcast and
it's on Freevee so you might want to take advantage
of that as well. But here's what I would tell
(17:15):
you JJ.
These markets are a little precarious right now. Do I
think they're gonna continue up? Oh, you bet I do.
But nothing goes straight up. So for you to take
a few $100,000 and invest it. All right. Now, I
think would be the biggest mistake you could ever make.
(17:37):
Pick out a few things that you want
and you can invest now and then just see what
happens and then little by little dollar cost, average this
money into the market. So, bottom line, my dear one,
I would be dollar cost averaging slowly, by the way
at this moment and not investing all at once. What
(17:59):
do you got next, KT?
KT (18:00):
From Karen? Hi KT. Pick me, pick me, pick me.
I love when they write that to me. Over the
last several years, I've accumulated a 12 month prudent reserve
and that amounts to a lot of money. 75,000 in
one account and 30,000 in another. Good for you, Karen.
I've had the money in high yield savings accounts so
(18:23):
that money is made 5% interest. However, as the interest
rates are gonna come down,
I'm wondering what to do with that prudent reserve. I
know it's supposed to be readily available, but it seems
like such a waste not to make great interest on
that amount of money, Suze, what should I do? I
(18:44):
love you guys. She said I love you guys.
Suze (18:47):
Karen. First of all, I don't think you're going to
see the 5% or the 4.5%. I doubt that you're
really at 5% right now. Maybe you're at 4.5% go
down immediately to nothing. So everybody needs to stop thinking
that interest rates going down, it's gonna go down bam
(19:08):
and in a month from now they're gonna be at 0% again.
They're gonna go down little by little because this is
money for an emergency fund. You cannot lock it up.
You have to be able to get at it any
time that you want. You might, if you want to
make sure that you're getting 4% or close to 4%
(19:30):
get the one year treasury bill right now, put the
money in there, you can sell them at any time.
If interest rates do go down,
you'll probably get back at least what you put in
when you sell it. But that way you've locked in 4%
for the entire year and then we see what happens there.
(19:52):
You really can't lock it in for longer than that.
Only because it's an emergency fund and maybe one year
from now the markets will be in such a place
and you'll have more money that maybe you take that
money and we start to invest it.
But for right now, don't freak out about something going
from 5% to 4% in your case. That's about a
(20:14):
$1300 difference or $100 a month.
And even though that's a lot of money, it is,
the situation never forget just a while ago, not that
long ago. Interest rates were at what? 0% 0.1% many
of you, by the way are still in bank accounts
(20:34):
where you're only getting 0.1% or that, what are you doing?
That is just nuts. Anyway. Go on KT.
KT (20:43):
All right. Next is from Melissa.
Hi, Suze. I understand you're a big fan of dollar
cost averaging. I will be receiving about $10,000 for a
car accident settlement within the next few weeks and $30,000
next September, I'd like to invest all of this money
(21:03):
in dividend ETFs, because I have no debt. I'm contributing 12%
to my 401k and I have a six month emergency fund.
Do I put everything in a high yield savings account
and then invest maybe $1000 at a time every week
into a dividend ETF or what's the best way to
(21:23):
go about dollar cost averaging with large sums of money?
Suze (21:28):
Given that you only have
a six month emergency fund when I have been telling
you now for years that everybody should have an 8
to 12 month emergency fund. Looks to me like girlfriend,
you're gonna be taking this money and putting it in
a high yield savings account or money market account
and you're gonna add the $30,000 to it again when
(21:50):
it comes in a year from now. And then you're
gonna see, is that an eight or 12 month emergency fund?
And if it is, and there's anything extra then we'll
talk about dollar cost averaging into things at that time.
All right, KT.
KT (22:03):
Ok. Next question is from Pat and Pat is asking
Suze and KT.
I have a question about IRMAA. So I have to
tell you all I didn't know what IRMAA was, so
I looked it up. It's an Income Related Monthly Adjusted
Amount from Medicare. Suze will tell you what that means.
(22:25):
But this is a question about IRMAA...
Suze (22:28):
You pay IRMAA.
KT (22:28):
My husband, my husband...
Suze (22:30):
Did you know that you pay IRMAA every single year?
So do I.
Alright. Go on, go on.
KT (22:39):
IRMAA Must be rich man. All right, my husband and I
are selling our rental property as we no longer want
to be landlords. Nor do we want to invest in
other options that said we are prepared to pay the taxes. No,
we will have to pay IRMMA for a year and
just wanna be totally done.
So then the question is, do I have to wait
(23:02):
for the two year Look back with Medicare to charge
the IRMAA fees? I don't know what that means.
Suze (23:09):
All right, let's see if I can explain this to you.
As you know everybody when you turn 65 which is
so fabulous. You qualify for Medicare
and I can't tell you how incredible Medicare is when
it comes to health needs. Do you know that that
entire operation that I went through and everything I did
(23:31):
not pay one penny for it.
KT (23:34):
What do you think that would have cost?
Well over a million bucks.
Suze (23:38):
Well over a million, over a million for what they
had to do and how long they had to do it.
I mean, I'm sure it was over a million dollars anyway. So,
what is IRMAA?
KT (23:50):
Wait, so she paid 0.
Suze (23:52):
You know that.
KT (23:53):
I know I'm telling everyone listening. That's what Medicare is incredibly,
incredibly important every year. Let's hope it never goes away.
Suze (24:02):
So you turn 65
and Medicare has a part A and a part B
and when it comes to part B, you pay a
monthly premium for it based on your income
and your income depending on what it is, you could
pay like up to $500 a month. I think we
(24:24):
pay 526 a month. KT out of our social security
check for Medicare. Part B
but Irma is really, it's a monthly adjusted amount for Medicare,
but IRMAA is based on your modified adjusted gross income
from two years prior. So they're always looking back two years.
(24:52):
And so therefore, uh you know, if you had an
income sale from a piece of property in 2024 the
income from that sale in this case would generally affect
her 2026 Medicare premium.
KT (25:09):
I got it.
Suze (25:10):
Now, here's the thing. However,
with social security, if you have what's called a life
changing event and I think it's form. Oh God, are
you gonna quote me on this social security at SS
A dash 44. Ok. I think that's it. Right.
KT (25:29):
You're probably right because you memorize numbers.
Anyway, you can request that. Social security adjusts your IRMAA
based on your current income.
Suze (25:42):
Usually if there's a significant reduction to a qualifying event. So,
and I have to tell you the sale of a
property qualifies for that. So Patricia, if I were you,
if you want the IRMAA increase to start in 2025
and be done after that one year, just
(26:03):
you need to contact them and see if in fact
it qualifies or what happens with 2024 what, 2022 whatever
it is you need to contact them and see if
it will help you. All right.
KT (26:19):
Ok. This is my final question from...
Suze (26:22):
Do you wanna know something here? I wouldn't necessarily wanna
get it done. Oh, I, you just handed me her
income tax... her email.
Did you see on the bottom? It says she wants
to do it now because she thinks tax brackets are
gonna go up over the next few years. That's why
she wants to do it now. I got it. All right.
(26:43):
See what you can do. Life changing event form.
SSA dash 4444 you said?
KT (26:50):
Ok, so from Danette. Hello Suze and KT. Happy Travels, Suze.
I purchased the must have documents online in 2009. Yes. Yes.
She is smart.
I opened my revocable trust changed my house title. You
mentioned the incapacity clause. Is it available with my Docs
(27:13):
automatically or do I need to fill it in, you know,
all over again and have them co-signed and notarized again?
Then she says, do I have to buy the newest Docs?
This is from Danette.
Suze (27:26):
So Danette, here's the great thing about the must have docs.
It's a one and done.
That's it. Meaning what once you have purchased them, no
matter what updates are made, you qualify for the updates
and without any extra cost at all,
(27:47):
you know, I would never talk to you about something
that I want you to buy that you have to
continue to buy and buy as it changes. So unlike
many of the other companies, when something changes, you have
to buy it again, that's not true with the must
have docs, your 2009 ones that you did buy has
(28:08):
the incapacity clause in it. However,
given that that was so long ago, I think it's
a really great idea if you re-did them so that
you see, where is everything? How did you do it?
Is there any changes that you wanna make and therefore
on your documents. When you go back and you go
(28:29):
to the program, there's a little help tab or whatever,
just contact the company
and you'll automatically be updated to the program as it
is today and it's just been totally updated by the way.
So if I were you, I would do that. I
know another thing I love about the must have docs
KT besides that. You can share it with as many
(28:53):
people in your family as you want.
KT (28:55):
Or friends.
Suze (28:55):
Or friends or whatever. So it's like it just takes
one of you to do it. $2500 worth of state
of the art documents
you have to go to, must have docs.com to see
how much they're selling for now because I actually don't know. Right.
But whatever it is, it is worth the price and
you can share it with as many people as you want.
(29:16):
Quizzie time. KT.
KT (29:18):
OK. What do you got for me?
Suze (29:20):
This is from MS. All right.
And she says the following and I know it's a she,
by the way, anyway, I'm 40 which means that I've
gone by people first, then money, then things for half
of my life. Thank you. I currently own my home
(29:42):
outright
but only have about 35% of total net worth invested
in the markets. The rest are in cash. I have
relatively low expenses for myself. Now, are all of you
listening to these facts because this quizzie isn't just for
KT to be able to answer, I give quizzies for
(30:06):
all of you to be able to answer, to know
if these things ever happened in your situation,
what you should do. All right. Now, again, this person
is single no kids. She says, however, my job is
quite unstable. Hence, I must be prepared to be retired
(30:29):
at any time.
I am a citizen of a low cost of living country. Hence,
plan on retiring there, should the need arise. She's 40.
She plans to retire there if the need arises. All right,
I am able to live at my parents' home indefinitely
(30:52):
from my estimates. If I were to liquidate my assets
and put the money in the bank with 3% interest,
I should have two times the monthly expenses that my
parents currently use.
Has anybody ever heard of inflation? But anyway. All right.
(31:13):
My question...
KT (31:14):
Sounds like a great place to go.
Suze (31:16):
My question is I have been thinking of upgrading my
apartment
to a swankier one in the city center, downtown vibes,
better air. I plan to use all or most of
the cash I have on hand for the upgrade or
(31:38):
take a minimal loan. Now, I am assuming here
that she has a home that she owns outright. She
may be thinking about selling her home, moving to a
bigger swankier apartment in the city,
but she'd have to use all the cash from her
(31:59):
home
and to make an upgrade or make or have a
minimal loan. Do I approve? Think about it.
Oh, you're looking at me like...
KT (32:12):
There's nothing to think no brainer here, Suze.
Suze (32:15):
Is that no?
KT (32:16):
Why would you do that? I would never do that
if I had an unstable job and I'm 40 years old,
I'd want to accumulate as much cash as possible. So
then I'd feel free.
Suze (32:30):
So, you've denied her?
KT (32:31):
Yes. Totally.
Suze (32:33):
Say it, Kt.
KT (32:34):
You are de-nied. That's the way you say it.
Suze (32:38):
So, what's funny about this quizzie is I wrote her back.
KT (32:42):
What did you say?
Suze (32:44):
I sent her a little picture of myself with a
stamp that said deny. They're ding, ding, ding, ding, ding.
So you're right. But here's why MS that you're thinking
in my opinion is not logical. You currently own your
home outright, you don't have any bills, whatever.
(33:05):
And what you're saying is that you want to move
to a swankier place, which means more expenses, more taxes,
more everything and you don't have a stable job.
So you have to be prepared to retire at any time. No,
at the age of 40 if you lose your job,
(33:26):
you get another job, you stay where you want. Obviously
you're liking wherever you live and you just want a
little more life around you. So go to that place,
the Swankier place and be entertained and then go home
to a place that you own outright.
So at 40 years of age, this is still your
(33:46):
compounding years. These are not the years for you to
be spending money and you need to be saving it
and investing it and being wise with money. And then
when you're old, like us, you can live on a
private island, you could do whatever you want at that
point in time.
KT (34:02):
Why doesn't she just rent something in the city and
see if she likes?
Suze (34:07):
No!
She doesn't need to be paying more money.
KT (34:11):
I don't know why she wants to do that.
Suze (34:13):
That's not our problem. Here's the other thing you say
that if you liquidate your assets and you put the
money in the bank with a 3% interest, how do
you know what interest rates are gonna be? How do
you know what your assets are going to be? If
you had done this plan years ago?
And you were thinking, oh, it's 2007, you've now lost
(34:36):
your job. You're gonna sell your home, you're gonna sell
your assets. You wouldn't get anywhere close to what anything
is currently worth today. And you say that you would
have two times the monthly expenses that your parents currently use.
Do you really wanna live the lifestyle that maybe your
parents are living?
So your thinking is wrong on this, you are to
(34:59):
think that you are going to make the most out
of your life here where you're obviously enjoying yourself or
you would be back home already. You're gonna save it.
You're gonna invest it. If you wanna swank your lifestyle,
go there for the weekend and come back, do whatever
but no, you are denied. All right, KT...
KT (35:20):
That's it. That's a wrap.
Suze (35:22):
That's a wrap. We may have gone too long today,
but we'll see. Sunday is going to be a very
interesting Suze School. Do you wanna know, why?
KT (35:30):
Do you know what you're doing?
Suze (35:32):
Yes.
KT (35:33):
What is it? Give us a hint. Tell us why it's gonna be interesting.
Suze (35:37):
It's gonna be interesting because for over a year now, have
I not been saying to all of you to buy
20 or 30 years preferably
of treasury bonds? Have I not been telling you that? Well,
when interest rates went down a week ago, those bonds
(35:57):
absolutely skyrocketed so much. I can't even tell you now,
I have a new strategy for you and therefore for
those of you who didn't do it back then,
I'm gonna give you a new strategy of what I
want you to be doing now. So until Sunday, there's
(36:20):
only one thing that we really want you to remember
when it comes to your money. And what is that KT?
KT (36:25):
People first, then money, then things.
Suze (36:28):
And if you do that, stay safe, don't wanna live
in a swankier place and stay healthy. You will be unstoppable.
September 26th, 2024. Welcome everybody to the Women and Money podcast.
As well as everybody smart enough to listen. This is
the KT and Suze episode.
KT (00:58):
Ask us anything. I'm a little jet lag. Still.
Suze (01:02):
You're a little something this morning.
KT (01:04):
You keep waking up at 330 in the morning. So
we got back from Spain. We had a great time. Everyone.
We both gained three pounds each
Suze (01:15):
and now we're in the end of September, which is
also a big birthday month. We have lots of birthdays
this month.
KT (01:21):
So everybody who has a birthday this month, we wish
you a happy, happy birthday.
Suze (01:27):
And what else do you want to tell them anything
about Spain?
KT (01:30):
Yeah, we loved visiting with Mel. We loved seeing Sammy
in the hometown she grew up in. I just have
to tell you this. It was spectacular.
Suze (01:39):
So we've been friends with Sammy and her mother Lithia
now for 10 years because it was in 2015 that
the first time KT and I walked the Camino,
it was Marley Camino, which is Lithia's company that hosted us.
And since then, we have become such close friends. I
(02:01):
can't tell you.
KT (02:02):
We did two more caminos thereafter.
Suze (02:05):
So however, but I just have to tell this story.
So they've always told us, Sammy, her daughter who's just stunning,
by the way,
always told us about how she was raised. She grew
up in Majorca in her grandma's home, grandma. And we
pictured this home that she described on a cliff overlooking
the Mediterranean, kind of like really elegant in its own
(02:27):
way or that's how I pictured it. And
we finally went and visited her there.
KT (02:33):
It was on a cliff. It was a 300 year
old home that her great, great, great grandmother and grandfather
actually built. It had a well
that you would get water from and it was everything
and more that we envisioned.
Suze (02:52):
And nothing had been changed over all these years,
KT (02:57):
Including the wait, including the little itty bitty tiny bed
that she had in her bedroom with her brother. These
two little skinny wooden beds and Sammy's like, you know,
5 ft seven or eight. And she's gorgeous. And here
she was in, I should post a picture of her
sitting on the edge of this little bed that she
(03:18):
grew up in as a child.
The same sheets, kind of same Snoopy sheets sheets.
Suze (03:24):
But anyway, fabulous. So fabulous. Anyway, we're glad to be
home and it was a great adventure for you.
KT (03:33):
Can't wait to go back to Spain. We just love
it there.
Suze (03:36):
So, KT, before we begin, where you're asking me questions
is I want you all to know if you don't
already know that Alliant Credit Union while we were gone
did have a rate decrease on their one year CD.
And it's now 4.60 for amounts under $75,000 and 4.65
(04:01):
for amounts of $75,000 or more. If you compare that,
by the way to the one year treasury, which is
currently at about 3.92 depending on the state that you
live in and your income tax bracket. That's still a great,
great deal. Also, I just wanna say, remember
(04:22):
that the 12 month CD at Alliant Credit Union is
good for anywhere from 12 to 17 months and 30 days.
You choose your maturity, you have to talk to them
to make sure that you're able to do that. So
if you compare that and you get it for 17
(04:42):
months and 30 days, now we're talking because the two
year treasury is at 3.5% right now, right around there.
So you should still go to my alliant.com. If you
want to lock in a good rate for that period
of time, I would take advantage of it if I
were you? What do you got for me, KT?
KT (05:03):
My first question, Suze is from Scott.
Suze (05:07):
Scott.
KT (05:08):
He said, Suze and KT when my dad passed away,
my mom put their home into a Tod to my
two sisters. And I, so that's a TOD KT.
Suze (05:19):
Tell everyone...
KT (05:19):
It's transfer on death account.
Suze (05:21):
Ding, ding, ding, ding, ding, ding, ding, ding, ding, ding,
KT (05:24):
Listen to this everyone. So Scott's oldest sister said to
him privately. I don't want anything to do with this house.
Pay me my third. The home in question is a
lake home with an assessed value exceeding $750,000. And, and
this is a little bit interesting. He said, Suze, I
(05:45):
feel immoral asking but can I open a term life
policy for my mom
so I can cover the cost to buy out my sisters?
I don't think that's immoral. So anyway, that's his question.
Suze (05:59):
Scott, here's what I would tell you. Now, it's not
an immoral question, but I'm not sure it solves your problem.
And let me tell you why a term life insurance
policy is only good for a specific term.
So let's say, I don't know how old you are
right now, but let's say your mother is older. Let's
(06:20):
say she's in her seventies and maybe she's gonna live
to her nineties, possibly even 100.
There's no way that a term policy at this point
in time, if that's how old she is, is going
to be cost effective. You may find that you pay
more in premiums over a long period of time
(06:41):
than you do if you were just to save that money,
possibly to have the money to buy out your sister
at the time. So I don't think a term policy
is the way to go. Remember, term life insurance is
meant to only be there during
younger years before you've had time to accumulate assets and
(07:03):
it allows you to do so at a very cost
effective rate, it's not meant to be your whole life.
So if I were you, that isn't how I would
solve this problem. I mean, I could go on and
on about ways that you could solve it, but that
wasn't your question to me. So, no, I don't think
your term life insurance policy will do it. I just don't.
(07:25):
All right.
KT (07:27):
So Suze, the next question is from um a listener
that said, I just got my must have documents and
started filling them out. It's a little surreal thinking about passing.
I read that I may wanna make my trust the
beneficiary for all of my bank
and retirement accounts. Is this accurate or would it be
(07:48):
better to make some or all of them POD provided?
I have no debt or expenses after death?
Suze (07:55):
So here's my question, KT, does he say or she
say
how old they are? Do, do they say if they're
married anything?
KT (08:04):
No, but they're just filling them out for the first time.
Suze (08:07):
So here's what I want everybody to know about. The
must have documents and what are the must have documents.
They are a living revocable trust,
advance directive and durable power of attorney for health care,
a will and a financial power of attorney. Those are
four documents that you must have. And if you want
(08:29):
those by the way, go to must have docs.com and
take a look because that's where you can get them.
What you have to understand is if you are married,
you never ever, ever want the trust to be the
beneficiary of any retirement account or any HSA account. Let's
(08:49):
be clear on that. So when this person says that
it should be my beneficiary for all my bank and
retirement accounts, not if you are married
again, I am underlining this. You do not want your
trust account to be the primary beneficiary if you are
married of any retirement accounts and or an HSA insurance account.
(09:12):
So here's what you all need to know as well. Sure,
you can make your accounts and everything pay on death.
But as I've said, many times, what if you don't die?
What if you become incapacitated,
then the pay on death account isn't going to help
you who's going to be able to access that money
(09:33):
if you need it. A living trust with an incapacity
clause in it, which the must have documents have is
the way to go bar. None. Just telling you you
want to avoid problems. Get the must have documents. All right, KT.
KT (09:49):
So the, the next questions from Nicole...
Suze (09:51):
Doesn't my voice sound deep today?
KT (09:53):
It sounds better. Yeah, it was a little bit hoarse
yesterday. So I'm glad today it's smoother.
Suze (10:00):
Tell them how I ran.
KT (10:01):
Oh my God, Suze. And I had a connection from
Majorca to Madrid. Madrid, Miami and the connection in Madrid
was less than 45 minutes. The plane got there a
little bit late but still.
So they changed the gate as soon as we comfortably
arrived to it, to the other side of the airport
with a train with a quarter of a mile of
(10:24):
walking and with all those floor escalators for another half
a mile. Suze was the marathon woman. Unbelievable. And we
were the last people there as their
Suze (10:36):
They held it.
KT (10:38):
Yeah, they held the plane and I said, please, please,
we need to make this flight and she looked at me.
She said, oh, Senora, follow me and we ran and
Suze was running like a bunny. Never saw her. I
never saw you run like that in the 24 years
we've been together.
Suze (10:55):
Because the thought of missing that flight
was more than I could deal with. All right, go on.
KT (11:01):
My next question is from Nicole. She says, hi KT.
She wrote it to me. Do you know when Fitz
will have a plan to advise us. So Fitz is
Keith Fitzgerald everyone.
And she said, I've been waiting ever since Suze mentioned
that possibility. Money market is still good, but I have
a feeling it will tumble next week. I can't wait
(11:23):
for your answer. So I'm not gonna answer it, Suze.
You tell Nicole.
Suze (11:28):
So first of all Nicole money market rates are not
going to tumble next week. So don't freak out about that. Now,
hundreds of you are writing and asking that question. So
what did I do? I sent them all to Keith
and said, what do you want me to tell people, Keith?
This is in your hands. This is your brilliant brainchild
(11:50):
of how it works. And here is what he wrote
the back. He said, tell them that we're down to
brass tacks and on the home stretch, we are quadruple
checking the math to be sure it's right.
We need to make sure that every research point is
backed up quantitatively and we are doing a final review
(12:14):
legally to ensure the appropriate protections are in place and
that the language is sufficient to clearly delineate what's happening
and the boundaries associated with users who sign up. I
am quoting
Mr Keith Fitzgerald there. So I'm bugging him. KT is
(12:34):
bugging him, right? Everybody's bugging him, but he is a
man of perfection. And until he knows that every single
thing works the way it's supposed to, it's not gonna happen.
But I do think it is probable that in October
you may see it
(12:56):
and if not October, I would almost say for sure,
by November, almost for sure, but we'll see what happens.
All right.
KT (13:03):
Next is from Teresa or Teresa...
Suze (13:06):
Wait... I have to say, right. And partly it's my
fault because when Keith talks to me about it, everybody
I keep saying.
But what if, but what if they want to do this?
What if that, so he has to keep going back
and redoing the math and everything to make sure that
every single one of you will be taken care of.
All right, go on.
KT (13:25):
OK. This, this is my favorite kind of question. Everyone
from Teresa.
You ladies rock. I heard I can do a one
time rollover from a traditional IRA to my HSA account
tax free if so how?
Suze (13:42):
You are absolutely right, My dear Teresa. One time
and one time only if you wanna use the money
in an IRA, a traditional IRA. So you've never paid
taxes on it or even a pretext, IRA rollover that
you may have, you can take that money and use
it to fund
(14:03):
up to the max if you want of the HSA
that you have and it is absolutely tax free. So
if you want to know how to do it in
your particular company, I would ask your HR person how
to do it. All right.
KT (14:19):
OK. So on the theme of 401ks, this is from Jenny.
My employer is being bought by another company. I have
a 401k with Fidelity. They're switching to a 403 B
with Empowered. I think that was formally prudential. Should I
roll over or start a new retirement account? I don't
(14:39):
know much about 403bs. Thank you. A
Suze (14:42):
403 B works essentially the same way as a 401k, really...
That's what you need to know. However, if it were
me
and I had a 401k with Fidelity and now they're
switching it to a 403b within power. What I want
you to think about, however, is if you did an
(15:05):
IRA rollover with the 401k that you have at Fidelity
and start a new retirement account there, you also have
the ability if you want to start converting to a
Roth IRA and your investment options will be far grander
than any 403b with E hat they'll offer you. But
(15:25):
if you make a lot of money
and you want to do a backdoor Roth IRA one day,
if you have a traditional IRA that you rolled over
and you're not gonna be able to do a backdoor Roth.
So therefore you might just wanna leave it with the
403b with Empower just depends how much money you make
(15:47):
a year, how much money you think you're gonna make
in the future. And if you like the investment options
and the fees that empower is going to charge you
other than, and, and actually the amount of money that
you have in there because if there isn't a lot
of money in there, then, oh, you bet I would
do an IRA rollover and then convert it to a
(16:09):
Roth IRA. All right.
KT (16:11):
Next question, Suze is from JJ. I've rolled over a
401k to an IRA and the money is now sitting
in cash instead of the old mutual funds since they
were unavailable in the IRA. With it being several $100,000...
our listeners are getting so rich. It's not even
(16:33):
$100,000. Is it better to quickly reinvest it all or
try to do dollar cost averaging dollar cost. Averaging was
several $100,000. I, I mean, I'm shocked. Go ahead.
Suze (16:48):
What are you shocked about?
KT (16:49):
The amount of money all these questions I'm getting there.
They are getting wealthier and...
Suze (16:54):
That's happens when you listen to me for the past 20 years.
And for those of you who are new to this podcast,
you can also watch the Suze Orman show that all
of these people most likely watched before the podcast and
it's on Freevee so you might want to take advantage
of that as well. But here's what I would tell
(17:15):
you JJ.
These markets are a little precarious right now. Do I
think they're gonna continue up? Oh, you bet I do.
But nothing goes straight up. So for you to take
a few $100,000 and invest it. All right. Now, I
think would be the biggest mistake you could ever make.
(17:37):
Pick out a few things that you want
and you can invest now and then just see what
happens and then little by little dollar cost, average this
money into the market. So, bottom line, my dear one,
I would be dollar cost averaging slowly, by the way
at this moment and not investing all at once. What
(17:59):
do you got next, KT?
KT (18:00):
From Karen? Hi KT. Pick me, pick me, pick me.
I love when they write that to me. Over the
last several years, I've accumulated a 12 month prudent reserve
and that amounts to a lot of money. 75,000 in
one account and 30,000 in another. Good for you, Karen.
I've had the money in high yield savings accounts so
(18:23):
that money is made 5% interest. However, as the interest
rates are gonna come down,
I'm wondering what to do with that prudent reserve. I
know it's supposed to be readily available, but it seems
like such a waste not to make great interest on
that amount of money, Suze, what should I do? I
(18:44):
love you guys. She said I love you guys.
Suze (18:47):
Karen. First of all, I don't think you're going to
see the 5% or the 4.5%. I doubt that you're
really at 5% right now. Maybe you're at 4.5% go
down immediately to nothing. So everybody needs to stop thinking
that interest rates going down, it's gonna go down bam
(19:08):
and in a month from now they're gonna be at 0% again.
They're gonna go down little by little because this is
money for an emergency fund. You cannot lock it up.
You have to be able to get at it any
time that you want. You might, if you want to
make sure that you're getting 4% or close to 4%
(19:30):
get the one year treasury bill right now, put the
money in there, you can sell them at any time.
If interest rates do go down,
you'll probably get back at least what you put in
when you sell it. But that way you've locked in 4%
for the entire year and then we see what happens there.
(19:52):
You really can't lock it in for longer than that.
Only because it's an emergency fund and maybe one year
from now the markets will be in such a place
and you'll have more money that maybe you take that
money and we start to invest it.
But for right now, don't freak out about something going
from 5% to 4% in your case. That's about a
(20:14):
$1300 difference or $100 a month.
And even though that's a lot of money, it is,
the situation never forget just a while ago, not that
long ago. Interest rates were at what? 0% 0.1% many
of you, by the way are still in bank accounts
(20:34):
where you're only getting 0.1% or that, what are you doing?
That is just nuts. Anyway. Go on KT.
KT (20:43):
All right. Next is from Melissa.
Hi, Suze. I understand you're a big fan of dollar
cost averaging. I will be receiving about $10,000 for a
car accident settlement within the next few weeks and $30,000
next September, I'd like to invest all of this money
(21:03):
in dividend ETFs, because I have no debt. I'm contributing 12%
to my 401k and I have a six month emergency fund.
Do I put everything in a high yield savings account
and then invest maybe $1000 at a time every week
into a dividend ETF or what's the best way to
(21:23):
go about dollar cost averaging with large sums of money?
Suze (21:28):
Given that you only have
a six month emergency fund when I have been telling
you now for years that everybody should have an 8
to 12 month emergency fund. Looks to me like girlfriend,
you're gonna be taking this money and putting it in
a high yield savings account or money market account
and you're gonna add the $30,000 to it again when
(21:50):
it comes in a year from now. And then you're
gonna see, is that an eight or 12 month emergency fund?
And if it is, and there's anything extra then we'll
talk about dollar cost averaging into things at that time.
All right, KT.
KT (22:03):
Ok. Next question is from Pat and Pat is asking
Suze and KT.
I have a question about IRMAA. So I have to
tell you all I didn't know what IRMAA was, so
I looked it up. It's an Income Related Monthly Adjusted
Amount from Medicare. Suze will tell you what that means.
(22:25):
But this is a question about IRMAA...
Suze (22:28):
You pay IRMAA.
KT (22:28):
My husband, my husband...
Suze (22:30):
Did you know that you pay IRMAA every single year?
So do I.
Alright. Go on, go on.
KT (22:39):
IRMAA Must be rich man. All right, my husband and I
are selling our rental property as we no longer want
to be landlords. Nor do we want to invest in
other options that said we are prepared to pay the taxes. No,
we will have to pay IRMMA for a year and
just wanna be totally done.
So then the question is, do I have to wait
(23:02):
for the two year Look back with Medicare to charge
the IRMAA fees? I don't know what that means.
Suze (23:09):
All right, let's see if I can explain this to you.
As you know everybody when you turn 65 which is
so fabulous. You qualify for Medicare
and I can't tell you how incredible Medicare is when
it comes to health needs. Do you know that that
entire operation that I went through and everything I did
(23:31):
not pay one penny for it.
KT (23:34):
What do you think that would have cost?
Well over a million bucks.
Suze (23:38):
Well over a million, over a million for what they
had to do and how long they had to do it.
I mean, I'm sure it was over a million dollars anyway. So,
what is IRMAA?
KT (23:50):
Wait, so she paid 0.
Suze (23:52):
You know that.
KT (23:53):
I know I'm telling everyone listening. That's what Medicare is incredibly,
incredibly important every year. Let's hope it never goes away.
Suze (24:02):
So you turn 65
and Medicare has a part A and a part B
and when it comes to part B, you pay a
monthly premium for it based on your income
and your income depending on what it is, you could
pay like up to $500 a month. I think we
(24:24):
pay 526 a month. KT out of our social security
check for Medicare. Part B
but Irma is really, it's a monthly adjusted amount for Medicare,
but IRMAA is based on your modified adjusted gross income
from two years prior. So they're always looking back two years.
(24:52):
And so therefore, uh you know, if you had an
income sale from a piece of property in 2024 the
income from that sale in this case would generally affect
her 2026 Medicare premium.
KT (25:09):
I got it.
Suze (25:10):
Now, here's the thing. However,
with social security, if you have what's called a life
changing event and I think it's form. Oh God, are
you gonna quote me on this social security at SS
A dash 44. Ok. I think that's it. Right.
KT (25:29):
You're probably right because you memorize numbers.
Anyway, you can request that. Social security adjusts your IRMAA
based on your current income.
Suze (25:42):
Usually if there's a significant reduction to a qualifying event. So,
and I have to tell you the sale of a
property qualifies for that. So Patricia, if I were you,
if you want the IRMAA increase to start in 2025
and be done after that one year, just
(26:03):
you need to contact them and see if in fact
it qualifies or what happens with 2024 what, 2022 whatever
it is you need to contact them and see if
it will help you. All right.
KT (26:19):
Ok. This is my final question from...
Suze (26:22):
Do you wanna know something here? I wouldn't necessarily wanna
get it done. Oh, I, you just handed me her
income tax... her email.
Did you see on the bottom? It says she wants
to do it now because she thinks tax brackets are
gonna go up over the next few years. That's why
she wants to do it now. I got it. All right.
(26:43):
See what you can do. Life changing event form.
SSA dash 4444 you said?
KT (26:50):
Ok, so from Danette. Hello Suze and KT. Happy Travels, Suze.
I purchased the must have documents online in 2009. Yes. Yes.
She is smart.
I opened my revocable trust changed my house title. You
mentioned the incapacity clause. Is it available with my Docs
(27:13):
automatically or do I need to fill it in, you know,
all over again and have them co-signed and notarized again?
Then she says, do I have to buy the newest Docs?
This is from Danette.
Suze (27:26):
So Danette, here's the great thing about the must have docs.
It's a one and done.
That's it. Meaning what once you have purchased them, no
matter what updates are made, you qualify for the updates
and without any extra cost at all,
(27:47):
you know, I would never talk to you about something
that I want you to buy that you have to
continue to buy and buy as it changes. So unlike
many of the other companies, when something changes, you have
to buy it again, that's not true with the must
have docs, your 2009 ones that you did buy has
(28:08):
the incapacity clause in it. However,
given that that was so long ago, I think it's
a really great idea if you re-did them so that
you see, where is everything? How did you do it?
Is there any changes that you wanna make and therefore
on your documents. When you go back and you go
(28:29):
to the program, there's a little help tab or whatever,
just contact the company
and you'll automatically be updated to the program as it
is today and it's just been totally updated by the way.
So if I were you, I would do that. I
know another thing I love about the must have docs
KT besides that. You can share it with as many
(28:53):
people in your family as you want.
KT (28:55):
Or friends.
Suze (28:55):
Or friends or whatever. So it's like it just takes
one of you to do it. $2500 worth of state
of the art documents
you have to go to, must have docs.com to see
how much they're selling for now because I actually don't know. Right.
But whatever it is, it is worth the price and
you can share it with as many people as you want.
(29:16):
Quizzie time. KT.
KT (29:18):
OK. What do you got for me?
Suze (29:20):
This is from MS. All right.
And she says the following and I know it's a she,
by the way, anyway, I'm 40 which means that I've
gone by people first, then money, then things for half
of my life. Thank you. I currently own my home
(29:42):
outright
but only have about 35% of total net worth invested
in the markets. The rest are in cash. I have
relatively low expenses for myself. Now, are all of you
listening to these facts because this quizzie isn't just for
KT to be able to answer, I give quizzies for
(30:06):
all of you to be able to answer, to know
if these things ever happened in your situation,
what you should do. All right. Now, again, this person
is single no kids. She says, however, my job is
quite unstable. Hence, I must be prepared to be retired
(30:29):
at any time.
I am a citizen of a low cost of living country. Hence,
plan on retiring there, should the need arise. She's 40.
She plans to retire there if the need arises. All right,
I am able to live at my parents' home indefinitely
(30:52):
from my estimates. If I were to liquidate my assets
and put the money in the bank with 3% interest,
I should have two times the monthly expenses that my
parents currently use.
Has anybody ever heard of inflation? But anyway. All right.
(31:13):
My question...
KT (31:14):
Sounds like a great place to go.
Suze (31:16):
My question is I have been thinking of upgrading my
apartment
to a swankier one in the city center, downtown vibes,
better air. I plan to use all or most of
the cash I have on hand for the upgrade or
(31:38):
take a minimal loan. Now, I am assuming here
that she has a home that she owns outright. She
may be thinking about selling her home, moving to a
bigger swankier apartment in the city,
but she'd have to use all the cash from her
(31:59):
home
and to make an upgrade or make or have a
minimal loan. Do I approve? Think about it.
Oh, you're looking at me like...
KT (32:12):
There's nothing to think no brainer here, Suze.
Suze (32:15):
Is that no?
KT (32:16):
Why would you do that? I would never do that
if I had an unstable job and I'm 40 years old,
I'd want to accumulate as much cash as possible. So
then I'd feel free.
Suze (32:30):
So, you've denied her?
KT (32:31):
Yes. Totally.
Suze (32:33):
Say it, Kt.
KT (32:34):
You are de-nied. That's the way you say it.
Suze (32:38):
So, what's funny about this quizzie is I wrote her back.
KT (32:42):
What did you say?
Suze (32:44):
I sent her a little picture of myself with a
stamp that said deny. They're ding, ding, ding, ding, ding.
So you're right. But here's why MS that you're thinking
in my opinion is not logical. You currently own your
home outright, you don't have any bills, whatever.
(33:05):
And what you're saying is that you want to move
to a swankier place, which means more expenses, more taxes,
more everything and you don't have a stable job.
So you have to be prepared to retire at any time. No,
at the age of 40 if you lose your job,
(33:26):
you get another job, you stay where you want. Obviously
you're liking wherever you live and you just want a
little more life around you. So go to that place,
the Swankier place and be entertained and then go home
to a place that you own outright.
So at 40 years of age, this is still your
(33:46):
compounding years. These are not the years for you to
be spending money and you need to be saving it
and investing it and being wise with money. And then
when you're old, like us, you can live on a
private island, you could do whatever you want at that
point in time.
KT (34:02):
Why doesn't she just rent something in the city and
see if she likes?
Suze (34:07):
No!
She doesn't need to be paying more money.
KT (34:11):
I don't know why she wants to do that.
Suze (34:13):
That's not our problem. Here's the other thing you say
that if you liquidate your assets and you put the
money in the bank with a 3% interest, how do
you know what interest rates are gonna be? How do
you know what your assets are going to be? If
you had done this plan years ago?
And you were thinking, oh, it's 2007, you've now lost
(34:36):
your job. You're gonna sell your home, you're gonna sell
your assets. You wouldn't get anywhere close to what anything
is currently worth today. And you say that you would
have two times the monthly expenses that your parents currently use.
Do you really wanna live the lifestyle that maybe your
parents are living?
So your thinking is wrong on this, you are to
(34:59):
think that you are going to make the most out
of your life here where you're obviously enjoying yourself or
you would be back home already. You're gonna save it.
You're gonna invest it. If you wanna swank your lifestyle,
go there for the weekend and come back, do whatever
but no, you are denied. All right, KT...
KT (35:20):
That's it. That's a wrap.
Suze (35:22):
That's a wrap. We may have gone too long today,
but we'll see. Sunday is going to be a very
interesting Suze School. Do you wanna know, why?
KT (35:30):
Do you know what you're doing?
Suze (35:32):
Yes.
KT (35:33):
What is it? Give us a hint. Tell us why it's gonna be interesting.
Suze (35:37):
It's gonna be interesting because for over a year now, have
I not been saying to all of you to buy
20 or 30 years preferably
of treasury bonds? Have I not been telling you that? Well,
when interest rates went down a week ago, those bonds
(35:57):
absolutely skyrocketed so much. I can't even tell you now,
I have a new strategy for you and therefore for
those of you who didn't do it back then,
I'm gonna give you a new strategy of what I
want you to be doing now. So until Sunday, there's
(36:20):
only one thing that we really want you to remember
when it comes to your money. And what is that KT?
KT (36:25):
People first, then money, then things.
Suze (36:28):
And if you do that, stay safe, don't wanna live
in a swankier place and stay healthy. You will be unstoppable.
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