October 10, 2024 • 25 mins
Since Hurricane Milton made it difficult to produce an entirely new episode, we’re presenting portions of a great Ask KT and Suze Anything episode from earlier this year. Suze answers questions about bankruptcy, the 5 Year Rule, living off interest and more. Plus, a "Can I Afford It?” quizzy.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Robert (00:43):
October 10th 2024. Welcome to the Women and Money podcast.
As well as everyone smart enough to listen. Hi, everybody.
This is Robert, the producer here. Now, as you know,
Hurricane Milton is bearing down on Florida.
Suze and KT are safe, but unfortunately, the weather is making,
(01:06):
producing a brand new podcast episode for you today a
little bit difficult.
Now we do want you to have your dose of
KT and Suze love and education. So, what we're gonna
do is here some portions of an Ask KT and
Suze Anything episode from earlier this year. And this one
(01:27):
features a really great "Can I Afford It?" quizzy. Suze
will be back on Sunday. And in the meantime, if
you are in Florida, we hope you're staying safe. We
want you to know we're thinking about you.
All right, here we go.
KT (01:43):
The first question I have is from Susie to Suze.
I'm in such a pickle. I have about 30,000 in
credit card debt and can't even make the minimum payments
monthly anymore. How can I get a grip on this debt,
a consolidation loan, a personal loan? Other? I'm overwhelmed with
the call. She's getting calls already
(02:05):
and she has no solution. What do you suggest, Susie does?
Suze (02:11):
Oh boy, you know...
KT (02:12):
Susie needs guidance.
Suze (02:14):
I think, you know,
there's a rule of thumb when you owe more than
what you're worth, you are essentially bankrupt. So let's just
say you owe $30,000 in credit card debt and let's
say you don't have any savings, you have no net worth.
You don't own a home, you don't own anything.
(02:38):
Essentially. It's very difficult then to get out of credit
card debt even if you can't make the minimum payments
due any more.
You might wanna check with NFCC.org, which is an organization
that will look at what you have, see if they
(02:59):
can take over your debt where you pay them, they
pay the credit card companies. Usually they take your interest
down to zero and maybe it costs you $10 a
month to have them do that and they put you
on a five year plan. However,
and I don't say this lightly.
A lot of times in life we get into situations
(03:23):
for whatever reason. Maybe you were sick, maybe something happened.
I don't know.
But if you really can't afford to even pay the
minimum payment due anymore.
It is possible that bankruptcy may be an option for you.
(03:44):
And I know that a lot of you are like,
wait a minute. But when it's legal, when it makes sense,
when you've learned your lesson and you're not going to
claim bankruptcy and then run up $30,000 of credit card
debt again because most people who claim bankruptcy, claim it twice.
(04:04):
But if it's legitimate that maybe you had a divorce,
maybe who knows what happened.
But bankruptcy in this particular case and I just have
a feeling
may be an option for you. It's something that you
probably should look into.
You know, KT, that's hard for me to say.
KT (04:24):
I know and you know how I feel about it.
Suze (04:26):
How do you feel about it?
KT (04:27):
I don't like bankruptcy on any level but there are
some situations where it's the last resort because look what
it does to credit, look what it does.
Suze (04:37):
KT, I got news for her if they're calling her
credit is already ruined, therefore she can't do a balance transfer.
I know you don't like it, but you really have
to understand that there are some people for whatever reason,
get into a situation and it just grows and really
(04:59):
KT it's not a good thing because if you have
debt and everything and you stop paying it and then
all of a sudden it goes to a collector and
it ends up with the marshal, they can actually garnish
your wages.
KT (05:13):
Ok. Next questions from Sandy. Suze, I have a Roth
that I've had for many years. I want to transfer
it to a Schwab brokerage firm.
Do I start the five year limit over again? And
is any new money that I put into the Roth,
would that start its own five year limit? Thanks from
(05:34):
an enthusiastic listener.
Suze (05:36):
Oh, that should be your quizzy.
KT (05:39):
I'm not gonna do that quizzy.
Suze (05:41):
No, because you don't know the answer and because you
have a can I afford it now as a quizzy. Listen, girlfriend,
if you already have had a Roth for many years
and you simply want to transfer it to a Roth
at another company. No, the five year limit does not
start over again and any new money you put into
(06:02):
that Roth.
It's a contributory Roth obviously does not start the five
year limit over again. If however, you had a traditional
IRA and you were converting it to a Roth, then
the five year starts all over again, but not in
this case, so good on you. All right.
KT (06:25):
Next question is from Deb, she said I am retired
and 65
I have 125,000 in my TSP pre-tax. Question, Should I
leave the money in the TSP or move to a
fidelity ira and slowly move to a Roth Ira or
(06:45):
ready for this one? Don't get crazy or buy an annuity,
which was suggested by her financial advisor.
The issue I have with the annuity is it would
be locked in for five or seven years. Wait, the
advisor says, wait until the RMD is required. I have
sufficient pension funds.
Suze (07:08):
Well, that is the stupidest thing I ever heard. Wait
till the RMD is required.
KT (07:12):
That's the stupidest thing from the financial advisor, not from Deb.
Suze (07:18):
So, Deb, here's the thing.
You have $125,000 in your TSP. If all of a
sudden you do an IRA rollover with it to fidelity,
what are you going to invest that $125,000 in? Who
is going to advise you how to invest that money?
(07:42):
Because what you've done over all the years in your
thrift savings plan is every month or every two weeks,
you put a little bit in from your paycheck and
here now you have $125,000. Do I mind if you
just leave it in the TSP where you're familiar with it?
(08:03):
I have to tell you I don't,
but if you feel confident with doing an IRA rollover
with it and then little by little moving it to
a Roth IRA. Ok. I don't have a problem with that. However,
just make sure that you're gonna feel comfortable with what
to do with $125,000 in terms of an annuity within
(08:28):
a retirement account. Don't even get me started.
That is just stupid, stupid, stupid. So, you're not going
to be doing that? Remember a retirement account is a
tax free or tax deferred account? And an annuity is
a tax deferred account. What sense does it make to
(08:50):
have a tax deferred account
within a tax free or tax deferred account? Makes none whatsoever.
You're not doing that. Do you hear me?
KT (09:00):
Makes sense to the financial advisor who gets a commission?
Suze (09:03):
Probably 5 to 7% 5 to 7%. I just want
to say on a
$125,000 where the money is locked up. We're talking about
7000 or more.
KT (09:17):
Ok. So Suze, this next question is like the million
dollar question for everyone. This is from Tanya. Tanya asks, Suze.
I love this question. Can you explain how people are
able to live off their interest?
Thank you for your purpose in this life. There's no
one I trust more than you when it comes to
(09:39):
my money, Tanya. Give Tanya a little guidance here and
everyone else listening,
Suze (09:45):
Tanya. That's such a sweet question. Tanya, here's what's interesting.
You work and you work and you work and you
make money and you save money and you invest money. Hopefully.
So that one day
when you no longer work for money, your money can
(10:08):
work for you
and you can save it either in retirement accounts, in
savings accounts, investing it in the stock market, even investing
it in a home where eventually you own it outright.
So, the key, in my opinion, to a successful retirement
where people can live off their interest is that during
(10:32):
their working years, they pay down all of their debt,
they own their car outright, they own their home outright.
They don't have a lot of expenses. Therefore, they then
have money that they've accumulated over the years
and that money is invested in such a way, whether
(10:54):
it's in treasuries or, you know, they're investing in stocks
that are paying them dividends of maybe six or 7%
or more.
They have investments that generate interest for them and the
interest that those investments are generating for them happen to
(11:15):
be more than what their expenses are after taxes. Maybe
they buy municipal bonds so that it's tax free. So
that's how it's done over time. And actually I have
to tell you that's what KT and I are planning
to do.
We've accumulated money, it's invested in such a way
(11:38):
so that when we are no longer generating income from working,
let's just say all of that stops the amount of
money we have will generate enough interest, dividends and income
for us to pay all of our expenses. So that's
how people are able to live off of their interest.
(12:00):
So that should be your goal as well. All right,
KT (12:04):
Suze, next question. KT and Suze. I have taxable bonds
in my Roth. Should I trade them for another investment
in my retirement account. So, I don't know, I don't
know what taxable bonds are.
Suze (12:19):
So, Kathy... O KT, she has your name. Whenever you
have a Roth IRA.
It does not matter. And this is true. Even if
you had a traditional IRA, it does not matter if
you have taxable bonds in your account. It does not
(12:39):
matter because they're held within a tax free or tax
deferred retirement account. So, no, you should not trade them
for another investment simply because you think they're taxable
because that's why you own them in a retirement account.
(13:01):
So you don't have to pay taxes on them when
you eventually withdraw the money. So the real question is,
do you want to still own a bond or is
there something better for you to be investing that money
in
because you could sell it, not pay any taxes on
it at all and then buy something else that maybe
(13:23):
fits you better. But no, you don't trade them for
another investment just because they're taxable. There's no such thing
in a Roth IRA while it's in there. And if
you hold it for at least five years and until
you're 59 and a half, don't worry, you're not gonna
pay taxes on anything. Girlfriend,
(13:44):
Right KT. Quizzy time. I'm leaving a little extra time
for quizzies... the Can I Afford It ones.
KT (13:54):
I love these.
Suze (13:55):
Right. And this is where you write in, you ask
a question and you tell me what it is that
you wanna buy and I tell you if you can
afford it or not
and you write in to Ask Suze Podcast at gmail.com.
And please, I need to know, write this down everybody,
(14:19):
your expenses versus your take home income. Do you have
any debt whatsoever? And what interest rate is it at?
How much do you have in an emergency fund?
Do you own money on a home? I need to
know the specifics. Have you fully funded retirement accounts? What
(14:41):
do you have really going? So, if you would leave
out any of those really important things, I can't answer
if you can afford it or not. All right, KT,
once again before you answer, the can afford it or not.
Give everybody a second to think about if they're going
to approve or deny.
(15:04):
This is from Lena and I chose it mainly because
of your twin sister. We call, we nickname her Lena.
All right.
Hello? From the land of the midnight sun, from Sweden.
All right.
I have seen a diamond ring that costs about $900.
(15:29):
Write it down. Everybody.
Lena wants. Are you writing this down, KT? I don't
see you writing it down right here.
KT (15:38):
This is my pen clicking.
Suze (15:42):
Lena wants to buy a ring,
KT, a diamond ring for $900.
Ok.
And she wants to know if she can afford this
ring to give it to herself.
Here's her money. Besides my normal monthly expenses of approximately $2500.
(16:05):
Those are her expenses. Her earnings are about $4200.
She has absolutely no debt. She pays off her credit
cards every month in full. She owns her car outright.
She doesn't have any loans and she rents a small
(16:29):
house besides that, she has approximately $17,000 in cash,
$28,000 in stocks outside of a retirement account,
she has $250,000 in an IRA, a 401k and a
(16:51):
Roth IRA. That's in total. She has $20,000 in CDs
at Alliant Credit Union. So that's the amount of money
that she has. But she goes on to say something
that I just want all of you to hear because
(17:12):
it's like, why does she want to buy herself
a $900 like wedding ring? All right.
She says I love this ring. I dream of this ring.
This ring would be my own wedding ring to me.
Kind of like the wedding ring I never got. Now
(17:34):
after an awfully long drawn out divorce, I'm completely on
my own with no relatives or family members alive other
than my daughter and I am saving and investing my
money and I rarely shop or go get my hair done.
My daughter feels I should buy it as she says,
(17:58):
I never buy anything for myself. Then I think should
I invest instead of buying a ring or just save
the $900 for a rainy day.
I hope you can give me advice on this.
So can I afford it or not? She's obviously going
(18:20):
to pay for it out of her cash.
So can she afford it or not? 2500 in expenses,
$4200 in income. No debt, credit card is paid in full.
Owns her car outright, owns a small house for herself
and her daughter has approximately 17,000 in cash, 28,000 in
(18:43):
stocks that she can get at 250,000 in retirements, 20,000
in Alliant on CDs.
And so there you go. And it's the ring of
her dreams.
KT (18:58):
The question is, can she afford it?
Suze (19:01):
Yes.
KT (19:02):
I think she can.
Suze (19:03):
So, do you approve or deny her?
KT (19:05):
Well, based on what she said, I have to approve
her positive. Yeah, I want to approve her. Absolutely.
Suze (19:13):
Lena Katie says she would approve you, but here is
what I would say to you.
You are approved. However,
Lena, I just want you to think about something you
obviously can afford it. An eight month emergency fund is $20,000.
(19:35):
You're $3000 short of that. However, you have money in
a Roth. If you spend $900 you're gonna be close
to $4000 short of an emergency fund. But you have
enough everywhere else that I'm not worried about that. Let me,
tell you what I am worried about.
(19:56):
You're still obviously young, you have a young daughter and
you're gonna be wearing this ring on your finger.
And I want you to think about, will this ring
really make you feel powerful?
Will this ring really do what you want to do
(20:16):
for yourself? Emotionally speaking? Will you have a ring on
and somebody's gonna see you and think, oh she's married
and then you're gonna have to explain if you get
interested in this person, why you have a ring on
your wedding finger? If that's in fact, where you were
going to wear it.
So, you can afford it.
(20:38):
But will it really give you what you feel like
it will give you or will $900 invested that will
grow and grow and grow for you
in the end? Give you a whole lot more because
a ring is never a symbol of strength, a piece
(21:01):
of jewelry or anything outside of yourself is never a
symbol of strength.
How you feel inside without any earrings, rings, purses, clothes, anything.
If you can feel strong with nothing,
(21:21):
then you will feel strong with everything.
Now, KT, what do you want to say? You can
disagree with that.
KT (21:31):
Oh, it's not a matter of disagreeing. I think everything
you said is very true. It's very true. So she
has to weigh in on what decision she wishes to make.
But what was really interesting is being relatively young and
walking around with a ring on her finger. It's kind
of like a, a little bit of a yellow or
(21:51):
red light for any possible,
you know, suitors are interest.
Suze (21:56):
And that's not to say that like with the wedding
ring that I wear and KT wears once in a while,
not all the time, like, because she's too active, it
means so much to me. I can't tell you the
little gift around my neck that was given to me
by somebody in India is probably truthfully the most important
(22:18):
thing I have.
But I can't think of anything that I myself bought myself.
That really means anything to me, KT. Right? So when
it's a gift from somebody else,
that gift or that item reminds you of the love
(22:40):
that was given to you with
when you buy something for yourself.
I don't know. Maybe I'm wrong. Maybe it can define you,
but you still have a little anger over your the ring.
So for those of you who have a piece of
jewelry or something and it reminds you of something that precious.
(23:05):
Usually it's from your mom who left it to you
or something or your spouse who gave it to you
and you're still married,
but very seldom. I don't know when you buy something
for yourself.
I don't know. But the bottom line is here, you
all have to decide that yourself and you absolutely can
(23:29):
afford it.
All right. I just don't have anything I've ever bought
myself that I treasure that I really treasure. Can you
think of anything?
KT (23:40):
Well, things in the jewelry category? I know that at
one point in your life and your career, you were
infatuated by watches, complex watches and now she never wears them.
She keeps them safe and sound, has no real interest anymore.
Suze (23:57):
But they've all quadrupled in value. So they were also
an investment but it was never
to make myself feel strong.
KT (24:05):
I think it was just something you appreciated.
Suze (24:08):
Right. It's like, I don't know. Anyway. All right, everybody,
there's only one thing we want you to remember when
it comes to your money and it is this:
KT (24:17):
People first.
Suze (24:19):
Then money, then things. That's a good one for today.
For the quizz. Right. And anyway, you stay safe and
if you do all that
you will be unstoppable.
October 10th 2024. Welcome to the Women and Money podcast.
As well as everyone smart enough to listen. Hi, everybody.
This is Robert, the producer here. Now, as you know,
Hurricane Milton is bearing down on Florida.
Suze and KT are safe, but unfortunately, the weather is making,
(01:06):
producing a brand new podcast episode for you today a
little bit difficult.
Now we do want you to have your dose of
KT and Suze love and education. So, what we're gonna
do is here some portions of an Ask KT and
Suze Anything episode from earlier this year. And this one
(01:27):
features a really great "Can I Afford It?" quizzy. Suze
will be back on Sunday. And in the meantime, if
you are in Florida, we hope you're staying safe. We
want you to know we're thinking about you.
All right, here we go.
KT (01:43):
The first question I have is from Susie to Suze.
I'm in such a pickle. I have about 30,000 in
credit card debt and can't even make the minimum payments
monthly anymore. How can I get a grip on this debt,
a consolidation loan, a personal loan? Other? I'm overwhelmed with
the call. She's getting calls already
(02:05):
and she has no solution. What do you suggest, Susie does?
Suze (02:11):
Oh boy, you know...
KT (02:12):
Susie needs guidance.
Suze (02:14):
I think, you know,
there's a rule of thumb when you owe more than
what you're worth, you are essentially bankrupt. So let's just
say you owe $30,000 in credit card debt and let's
say you don't have any savings, you have no net worth.
You don't own a home, you don't own anything.
(02:38):
Essentially. It's very difficult then to get out of credit
card debt even if you can't make the minimum payments
due any more.
You might wanna check with NFCC.org, which is an organization
that will look at what you have, see if they
(02:59):
can take over your debt where you pay them, they
pay the credit card companies. Usually they take your interest
down to zero and maybe it costs you $10 a
month to have them do that and they put you
on a five year plan. However,
and I don't say this lightly.
A lot of times in life we get into situations
(03:23):
for whatever reason. Maybe you were sick, maybe something happened.
I don't know.
But if you really can't afford to even pay the
minimum payment due anymore.
It is possible that bankruptcy may be an option for you.
(03:44):
And I know that a lot of you are like,
wait a minute. But when it's legal, when it makes sense,
when you've learned your lesson and you're not going to
claim bankruptcy and then run up $30,000 of credit card
debt again because most people who claim bankruptcy, claim it twice.
(04:04):
But if it's legitimate that maybe you had a divorce,
maybe who knows what happened.
But bankruptcy in this particular case and I just have
a feeling
may be an option for you. It's something that you
probably should look into.
You know, KT, that's hard for me to say.
KT (04:24):
I know and you know how I feel about it.
Suze (04:26):
How do you feel about it?
KT (04:27):
I don't like bankruptcy on any level but there are
some situations where it's the last resort because look what
it does to credit, look what it does.
Suze (04:37):
KT, I got news for her if they're calling her
credit is already ruined, therefore she can't do a balance transfer.
I know you don't like it, but you really have
to understand that there are some people for whatever reason,
get into a situation and it just grows and really
(04:59):
KT it's not a good thing because if you have
debt and everything and you stop paying it and then
all of a sudden it goes to a collector and
it ends up with the marshal, they can actually garnish
your wages.
KT (05:13):
Ok. Next questions from Sandy. Suze, I have a Roth
that I've had for many years. I want to transfer
it to a Schwab brokerage firm.
Do I start the five year limit over again? And
is any new money that I put into the Roth,
would that start its own five year limit? Thanks from
(05:34):
an enthusiastic listener.
Suze (05:36):
Oh, that should be your quizzy.
KT (05:39):
I'm not gonna do that quizzy.
Suze (05:41):
No, because you don't know the answer and because you
have a can I afford it now as a quizzy. Listen, girlfriend,
if you already have had a Roth for many years
and you simply want to transfer it to a Roth
at another company. No, the five year limit does not
start over again and any new money you put into
(06:02):
that Roth.
It's a contributory Roth obviously does not start the five
year limit over again. If however, you had a traditional
IRA and you were converting it to a Roth, then
the five year starts all over again, but not in
this case, so good on you. All right.
KT (06:25):
Next question is from Deb, she said I am retired
and 65
I have 125,000 in my TSP pre-tax. Question, Should I
leave the money in the TSP or move to a
fidelity ira and slowly move to a Roth Ira or
(06:45):
ready for this one? Don't get crazy or buy an annuity,
which was suggested by her financial advisor.
The issue I have with the annuity is it would
be locked in for five or seven years. Wait, the
advisor says, wait until the RMD is required. I have
sufficient pension funds.
Suze (07:08):
Well, that is the stupidest thing I ever heard. Wait
till the RMD is required.
KT (07:12):
That's the stupidest thing from the financial advisor, not from Deb.
Suze (07:18):
So, Deb, here's the thing.
You have $125,000 in your TSP. If all of a
sudden you do an IRA rollover with it to fidelity,
what are you going to invest that $125,000 in? Who
is going to advise you how to invest that money?
(07:42):
Because what you've done over all the years in your
thrift savings plan is every month or every two weeks,
you put a little bit in from your paycheck and
here now you have $125,000. Do I mind if you
just leave it in the TSP where you're familiar with it?
(08:03):
I have to tell you I don't,
but if you feel confident with doing an IRA rollover
with it and then little by little moving it to
a Roth IRA. Ok. I don't have a problem with that. However,
just make sure that you're gonna feel comfortable with what
to do with $125,000 in terms of an annuity within
(08:28):
a retirement account. Don't even get me started.
That is just stupid, stupid, stupid. So, you're not going
to be doing that? Remember a retirement account is a
tax free or tax deferred account? And an annuity is
a tax deferred account. What sense does it make to
(08:50):
have a tax deferred account
within a tax free or tax deferred account? Makes none whatsoever.
You're not doing that. Do you hear me?
KT (09:00):
Makes sense to the financial advisor who gets a commission?
Suze (09:03):
Probably 5 to 7% 5 to 7%. I just want
to say on a
$125,000 where the money is locked up. We're talking about
7000 or more.
KT (09:17):
Ok. So Suze, this next question is like the million
dollar question for everyone. This is from Tanya. Tanya asks, Suze.
I love this question. Can you explain how people are
able to live off their interest?
Thank you for your purpose in this life. There's no
one I trust more than you when it comes to
(09:39):
my money, Tanya. Give Tanya a little guidance here and
everyone else listening,
Suze (09:45):
Tanya. That's such a sweet question. Tanya, here's what's interesting.
You work and you work and you work and you
make money and you save money and you invest money. Hopefully.
So that one day
when you no longer work for money, your money can
(10:08):
work for you
and you can save it either in retirement accounts, in
savings accounts, investing it in the stock market, even investing
it in a home where eventually you own it outright.
So, the key, in my opinion, to a successful retirement
where people can live off their interest is that during
(10:32):
their working years, they pay down all of their debt,
they own their car outright, they own their home outright.
They don't have a lot of expenses. Therefore, they then
have money that they've accumulated over the years
and that money is invested in such a way, whether
(10:54):
it's in treasuries or, you know, they're investing in stocks
that are paying them dividends of maybe six or 7%
or more.
They have investments that generate interest for them and the
interest that those investments are generating for them happen to
(11:15):
be more than what their expenses are after taxes. Maybe
they buy municipal bonds so that it's tax free. So
that's how it's done over time. And actually I have
to tell you that's what KT and I are planning
to do.
We've accumulated money, it's invested in such a way
(11:38):
so that when we are no longer generating income from working,
let's just say all of that stops the amount of
money we have will generate enough interest, dividends and income
for us to pay all of our expenses. So that's
how people are able to live off of their interest.
(12:00):
So that should be your goal as well. All right,
KT (12:04):
Suze, next question. KT and Suze. I have taxable bonds
in my Roth. Should I trade them for another investment
in my retirement account. So, I don't know, I don't
know what taxable bonds are.
Suze (12:19):
So, Kathy... O KT, she has your name. Whenever you
have a Roth IRA.
It does not matter. And this is true. Even if
you had a traditional IRA, it does not matter if
you have taxable bonds in your account. It does not
(12:39):
matter because they're held within a tax free or tax
deferred retirement account. So, no, you should not trade them
for another investment simply because you think they're taxable
because that's why you own them in a retirement account.
(13:01):
So you don't have to pay taxes on them when
you eventually withdraw the money. So the real question is,
do you want to still own a bond or is
there something better for you to be investing that money
in
because you could sell it, not pay any taxes on
it at all and then buy something else that maybe
(13:23):
fits you better. But no, you don't trade them for
another investment just because they're taxable. There's no such thing
in a Roth IRA while it's in there. And if
you hold it for at least five years and until
you're 59 and a half, don't worry, you're not gonna
pay taxes on anything. Girlfriend,
(13:44):
Right KT. Quizzy time. I'm leaving a little extra time
for quizzies... the Can I Afford It ones.
KT (13:54):
I love these.
Suze (13:55):
Right. And this is where you write in, you ask
a question and you tell me what it is that
you wanna buy and I tell you if you can
afford it or not
and you write in to Ask Suze Podcast at gmail.com.
And please, I need to know, write this down everybody,
(14:19):
your expenses versus your take home income. Do you have
any debt whatsoever? And what interest rate is it at?
How much do you have in an emergency fund?
Do you own money on a home? I need to
know the specifics. Have you fully funded retirement accounts? What
(14:41):
do you have really going? So, if you would leave
out any of those really important things, I can't answer
if you can afford it or not. All right, KT,
once again before you answer, the can afford it or not.
Give everybody a second to think about if they're going
to approve or deny.
(15:04):
This is from Lena and I chose it mainly because
of your twin sister. We call, we nickname her Lena.
All right.
Hello? From the land of the midnight sun, from Sweden.
All right.
I have seen a diamond ring that costs about $900.
(15:29):
Write it down. Everybody.
Lena wants. Are you writing this down, KT? I don't
see you writing it down right here.
KT (15:38):
This is my pen clicking.
Suze (15:42):
Lena wants to buy a ring,
KT, a diamond ring for $900.
Ok.
And she wants to know if she can afford this
ring to give it to herself.
Here's her money. Besides my normal monthly expenses of approximately $2500.
(16:05):
Those are her expenses. Her earnings are about $4200.
She has absolutely no debt. She pays off her credit
cards every month in full. She owns her car outright.
She doesn't have any loans and she rents a small
(16:29):
house besides that, she has approximately $17,000 in cash,
$28,000 in stocks outside of a retirement account,
she has $250,000 in an IRA, a 401k and a
(16:51):
Roth IRA. That's in total. She has $20,000 in CDs
at Alliant Credit Union. So that's the amount of money
that she has. But she goes on to say something
that I just want all of you to hear because
(17:12):
it's like, why does she want to buy herself
a $900 like wedding ring? All right.
She says I love this ring. I dream of this ring.
This ring would be my own wedding ring to me.
Kind of like the wedding ring I never got. Now
(17:34):
after an awfully long drawn out divorce, I'm completely on
my own with no relatives or family members alive other
than my daughter and I am saving and investing my
money and I rarely shop or go get my hair done.
My daughter feels I should buy it as she says,
(17:58):
I never buy anything for myself. Then I think should
I invest instead of buying a ring or just save
the $900 for a rainy day.
I hope you can give me advice on this.
So can I afford it or not? She's obviously going
(18:20):
to pay for it out of her cash.
So can she afford it or not? 2500 in expenses,
$4200 in income. No debt, credit card is paid in full.
Owns her car outright, owns a small house for herself
and her daughter has approximately 17,000 in cash, 28,000 in
(18:43):
stocks that she can get at 250,000 in retirements, 20,000
in Alliant on CDs.
And so there you go. And it's the ring of
her dreams.
KT (18:58):
The question is, can she afford it?
Suze (19:01):
Yes.
KT (19:02):
I think she can.
Suze (19:03):
So, do you approve or deny her?
KT (19:05):
Well, based on what she said, I have to approve
her positive. Yeah, I want to approve her. Absolutely.
Suze (19:13):
Lena Katie says she would approve you, but here is
what I would say to you.
You are approved. However,
Lena, I just want you to think about something you
obviously can afford it. An eight month emergency fund is $20,000.
(19:35):
You're $3000 short of that. However, you have money in
a Roth. If you spend $900 you're gonna be close
to $4000 short of an emergency fund. But you have
enough everywhere else that I'm not worried about that. Let me,
tell you what I am worried about.
(19:56):
You're still obviously young, you have a young daughter and
you're gonna be wearing this ring on your finger.
And I want you to think about, will this ring
really make you feel powerful?
Will this ring really do what you want to do
(20:16):
for yourself? Emotionally speaking? Will you have a ring on
and somebody's gonna see you and think, oh she's married
and then you're gonna have to explain if you get
interested in this person, why you have a ring on
your wedding finger? If that's in fact, where you were
going to wear it.
So, you can afford it.
(20:38):
But will it really give you what you feel like
it will give you or will $900 invested that will
grow and grow and grow for you
in the end? Give you a whole lot more because
a ring is never a symbol of strength, a piece
(21:01):
of jewelry or anything outside of yourself is never a
symbol of strength.
How you feel inside without any earrings, rings, purses, clothes, anything.
If you can feel strong with nothing,
(21:21):
then you will feel strong with everything.
Now, KT, what do you want to say? You can
disagree with that.
KT (21:31):
Oh, it's not a matter of disagreeing. I think everything
you said is very true. It's very true. So she
has to weigh in on what decision she wishes to make.
But what was really interesting is being relatively young and
walking around with a ring on her finger. It's kind
of like a, a little bit of a yellow or
(21:51):
red light for any possible,
you know, suitors are interest.
Suze (21:56):
And that's not to say that like with the wedding
ring that I wear and KT wears once in a while,
not all the time, like, because she's too active, it
means so much to me. I can't tell you the
little gift around my neck that was given to me
by somebody in India is probably truthfully the most important
(22:18):
thing I have.
But I can't think of anything that I myself bought myself.
That really means anything to me, KT. Right? So when
it's a gift from somebody else,
that gift or that item reminds you of the love
(22:40):
that was given to you with
when you buy something for yourself.
I don't know. Maybe I'm wrong. Maybe it can define you,
but you still have a little anger over your the ring.
So for those of you who have a piece of
jewelry or something and it reminds you of something that precious.
(23:05):
Usually it's from your mom who left it to you
or something or your spouse who gave it to you
and you're still married,
but very seldom. I don't know when you buy something
for yourself.
I don't know. But the bottom line is here, you
all have to decide that yourself and you absolutely can
(23:29):
afford it.
All right. I just don't have anything I've ever bought
myself that I treasure that I really treasure. Can you
think of anything?
KT (23:40):
Well, things in the jewelry category? I know that at
one point in your life and your career, you were
infatuated by watches, complex watches and now she never wears them.
She keeps them safe and sound, has no real interest anymore.
Suze (23:57):
But they've all quadrupled in value. So they were also
an investment but it was never
to make myself feel strong.
KT (24:05):
I think it was just something you appreciated.
Suze (24:08):
Right. It's like, I don't know. Anyway. All right, everybody,
there's only one thing we want you to remember when
it comes to your money and it is this:
KT (24:17):
People first.
Suze (24:19):
Then money, then things. That's a good one for today.
For the quizz. Right. And anyway, you stay safe and
if you do all that
you will be unstoppable.
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