April 30, 2023 • 40 mins
Today’s Suze School is a lesson about being absolutely sure with your money. Suze reviews the latest with the economy, what’s happening with banks and energy stocks. She explains why you have to be out of credit card debt and have your eight to 12 month emergency fund secure so you can weather potential financial storms.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Suze (00:29):
April 30th 2023. Welcome everybody to the women and Money
podcast as well as everybody smart enough to listen. So
today is Suze School and today I want to talk
about what I know for sure
(00:51):
with things that have happened in the economy as well
as touching a little bit on oil and P X
D because I know all of you want to know
about it. I am not going to be talking about
series I Bonds today. Even though I know that the
rate is at 4.3% the fixed rate is at 0.90
(01:14):
and everything, I haven't changed my mind about it
so we can talk about it a little bit if
you want to next week. But really there's not much
more that I want to say. And the reason is
especially as I go through what I know for sure.
I know for sure. I want my money to be
(01:35):
liquid and I can get at it when I know
I can get at it and not have to wait
for a period of time to do so. So that's
just as simple of an explanation as I could give
you as to why I'm sticking by what I talked
about before when it came to Series I Bonds.
(01:57):
So, what do I know for sure when it comes
to the economy right here and right now?
This is not a heavy Suze school,
but it's really what is going on and what I
know for sure and what you should know for sure
about this economy.
(02:19):
So get out your Suze notebooks. I wanna start with
the banking system and regional banks because you know, it
wasn't that long ago, what was it? March 10th when
Silicon Valley Bank went under, when Signature Bank went under,
(02:42):
when Silver Gate went under.
I know for sure as you know, for sure, three
banks went under and we also know that the people
who had money in those banks
that were over the FDIC insurance limit for whatever reason,
(03:04):
the FDIC, the government and everybody decided that we were
going to make them whole, even if they were over
the FDIC insurance limit. Ok, whether that was wise or
not only time will tell.
But what's really important to understand
(03:27):
is that just because they did that with those three
banks does not mean on any level that they are
going to do it with other banks that fail.
And what I also know for sure is, oh, other
banks are going to fail. There is no way that
(03:49):
those are the only three banks that are going to fail.
In fact, we'll talk about that in one second
For we also know that as of last Friday, all
this information came out and said that the reason those
banks failed was because of management error.
(04:14):
The people who were in charge of those banks mismanaged
the funds. And that is the reason that they failed.
And I know for sure that the reason that they
were able to mismanage those funds is because back in 2018,
the regulations were absolutely lifted to make it easier for
(04:40):
banks to do what banks did when it came to
lending and all kinds of things.
And that because those regulations were lifted, that also contributed
to why those banks failed because the management were allowed
to do things that they weren't allowed to do before 2018.
(05:06):
Now, I also know for sure
that as of last Friday, First Republic Bank is most
likely going to also go into receivership and have to
be bailed out by the FDIC.
What we don't know however is that if this time,
(05:28):
as I mentioned just a little bit ago, for those
people who had more money and First Republic than the
FDIC limits, if everybody's gonna step in and say you'll
be insured as well. Somehow I have a feeling they're
not going to.
Now, I just want to put a pin in this
(05:49):
for a second and talk about First Republic Bank,
Because First Republic Bank was touted
as the bank, if you have a business
you should go to. They were like the number one
bank and they weren't just a regional bank, even though
(06:10):
they were in San Francisco, they were in New York.
They were a fabulous fabulous bank or so I thought
or so Miss Travis thought because everybody, First Republic Bank
was our bank,
The majority of our liquid cash for our businesses for
(06:35):
how we ran everything went through First Republic Bank.
Now, I'm telling you this because I also want to
tell you what I know for sure, which is the
goal of money is for you to be secure.
So it was around February 7th. I think that's around
(06:59):
when it was that First Republic Bank, because we had
money in that bank, I followed the price of the
stock very carefully.
And First Republic Bank was about, I think $140 a share.
And all right, it was down still quite a bit,
(07:20):
but all right, $140 a share was still a respectable price.
And as I was watching it, right, it was a
month later, now it was March 7th
and the price went from a month earlier, 140 down
to 115.
(07:41):
And I was like, I'm not quite liking this KT. Now,
remember again, it was on March 10th, that Silicon Valley
Bank announced they were caput. Ok.
So now we're at March 9th, right? When everybody knew
(08:02):
that Silicon Valley Bank was gonna go under right around there.
And now First Republic is at 96
on March 13th, it was at $31 a share and Friday,
it was at $2 a share.
So the reason that I'm telling you this is that
(08:25):
because we were customers of First Republic Bank, we started
to get letters and emails saying there is nothing to
worry about. We're fine. You don't need to take your
money out, don't worry about it. And I said to KT,
KT I want all the money out of that bank now.
And she said, oh, Suze, I'm gonna leave my money
(08:48):
in that bank because I like that bank. That's my
checking account. I have checks here and nothing's gonna happen
to it and it's ok. And I said KT
I'm gonna overrule you on this and I'm putting in
instructions that every single penny that we have in there
needs to come out. And a few days later it
(09:13):
was out.
But KT kept saying, Suze, can't, we just leave a
little money in there. I like that bank. It's such
a good bank.
Banks are not friends. Credit unions are not friends either.
(09:33):
It's not about, do you like them? Do you not
like them?
It's, do you feel secure with your money in them?
And once rumors start, you have to pay attention to
those rumors. That's what I know for sure. And sure
(09:53):
enough here we are
like April 28th, 29th and First Republic Bank is going under.
I want you to think about that for a second.
So it's really, really important
(10:13):
that you make sure that your money is someplace that
you feel secure and that you feel safe and sound
again. Do I have money at Alliant Credit Union? Does
KT have money at Alliant Credit Union? Absolutely. Because I
(10:34):
do feel safe and sound there.
One thing I know for sure is that I do
not want all of you,
And I said this before, but it's really important to
just keep going for the highest little interest rate here
or there and switching your money all the time.
(10:56):
So what I know for sure is that a lot
of you are looking around and going, I can get
a quarter of a point more here. I can get
a half a point more there or whatever it may be.
Just understand.
the most important thing is not the interest rate that
you're getting, although you want to get a good interest rate,
(11:21):
but you never want your financial institution to stretch to
get a high return simply to do what? Attract customers
And that's exactly in many ways what Silicon Valley Bank
was doing, making good offers that they shouldn't have been
making and on and on. So I know for sure
(11:46):
that you want to know where you are
is safe and sound and you are absolutely invested under
the FDIC limits depending how you have used them because
obviously you can have more than $250,000 if in fact,
(12:07):
you are using it correctly. Same holds true with credit unions. However,
they are insured by NCUA, banks FDIC. Ok,
let's continue. Now,
what I also know for sure
is that stimulus checks and easy money lending
(12:31):
and the very low interest rates of a few years
ago enticed so many of you into buying a truck
or car that you really could not afford. I cannot
even begin to believe how many people I have talked
to lately that have purchased a truck or car that are,
(12:55):
that co is costing them like $80,000
at an average payment of 700 to $1000 a month
that they've financed over 7 to 10 years. Like, are
you kidding me?
(13:16):
I also know that many of those loans now are
60 or more days past due. In fact, the past
due payments on cars and trucks are the highest rate
that they have been since 2006.
(13:39):
And we all know what started to happen in 2006.
Don't we? If you don't, you better look up history
of what went on in 2006, 2007, 2008, 2009.
It was horrific on every possible level. I also know
(14:03):
for sure
that the most important bill
that every one of you who owns a home, a
home that you live in a single family residence, that
the most important bill that you pay every single month
is your mortgage payment. And why is that? Because you
(14:26):
don't want to lose your home?
And what I also know for sure
is that now mortgage payments,
the delinquency of mortgage payments just like with car loans
are starting to increase and increase and increase.
(14:47):
I also know for sure that the delinquency rate of
credit cards are increasing so fast. I can't even tell
you especially those that are 90 days late
or more.
All right. Now, what's really important about that? Is that
(15:09):
all creditors wait
until you are 90 days late with a payment for
them to crack down on you hard and once you
are late for 90 days or more, that dings your
credit score or your FICO score, which is really the
(15:32):
only one that matters.
It dings it more than anything.
And when it dings it, you may think that oh,
if I just simply pay it off in full and
bring it current or whatever, that will help my FICO score,
it will not
(15:52):
if you are late on payments, you are far better off,
write this down. You are far better off bringing your
payments up to where they should be on late payments
that are 20 days, late, 30 days, late, 60 days late.
But don't even bother on those that are 90 days
(16:13):
late or more because they're not gonna help your FICO
score at all. Does that surprise all of you probably does.
So, what do I do with the information that I
know for sure.
Well, first of all, I pass it on to you
because I want you to keep everything in perspective.
(16:39):
I don't want you to just get caught up in
the ups and the downs of the market that everybody
may be saying to you. It's ok. The economy is
doing good. Maybe we're gonna have a soft landing, don't
worry about it. Just keep spending, spending, spending,
You know, I'll never forget the time that I was
(17:00):
on a morning show
and it was right around 2007, 2008.
And I was telling everybody to stop spending money, stop it. Everybody,
you need to save your money, you need to pay
down your credit card a lot. Like what I'm telling
(17:21):
you right now
And then what happened was they went on to their
next guest, but I was still on and I could
hear them
and I heard the next guest say absolutely wrong, Suze
Orman is wrong.
You all need to keep stimulating this economy. If you
(17:42):
stop spending, you're gonna hurt the economy, everything will go down.
So keep spending everybody. Otherwise we're gonna have a problem
and I'll never forget asking the producer who was still
talking to me about something else. And I said to him,
can you let me go back on the air?
(18:03):
I need to tell that person what I think and
I'll never forget going back on and saying, what are
you talking about?
You care more about the economy and people getting in
debt and keeping things going so everything can seem ok
versus making sure that they are ok.
(18:23):
You have to make sure that they're ok and it's
my job to make sure that every one of you
is ok.
Which means I really want you to start conserving your money. Now.
I've been telling you this for a while now,
but I know for sure that something is not right
(18:48):
in this economy. I just gave you a few things
that I wanted you to know that I know and
I'm gonna tell you a little bit more how that
all plays out.
But I want you to take this seriously.
I want you to not think, oh, the summer months
are coming and let's go on vacation and it's ok.
(19:08):
Let's do this, let's do that. You can do all
those things. I don't have a problem with that, but
you better be out of credit card debt. You absolutely
better be having an 8 to 12 month emergency fund.
You better have your home equity line of credits paid
off and you better know
(19:29):
that your job is absolutely secure because the other thing
I know for sure is that so many companies are
laying off 4000 people here, 5000 people there. I really
want you to know for sure
that you have everything the way you need to have
(19:53):
it for you to be secure no matter what happens. Now,
I don't know what's gonna happen. I can tell you that,
but I know for sure
that things aren't quite right now. A lot of you
write me and you're watching like this last week, the
(20:13):
market go down 300 points one day and then you
see it go up 500 again up on Friday. And
you hear me give this webinar where I say, I
absolutely think it's possible
that these markets could go down another 15 or 20%
but I don't know when that's gonna happen,
(20:35):
but you will see them go up and down in
the meantime. May I remind all of you that back
in 2008? It was mid March. I don't think March
is a good time for this economy anyway, it was 2008,
mid March when Bear Stearns, one of the most prestigious
(20:57):
brokerage firms went under
and when it went under, it was taken over by
JP Morgan
and after JP Morgan, which is one of the largest
banks out there took it over. Everybody felt like, oh,
that's over. Everything's ok. We don't have to worry a
(21:19):
little bit like everybody was feeling after SVB and everybody
else went under until maybe last Friday when First Republic
went under. But everybody was feeling great
and right after that, the Standard and Poor's 500 index
(21:41):
over the next two months, ran up 15%.
Everybody was so happy. Well, Suze Orman was still on CNBC,
saying what I'm telling you now, what I know for sure,
which is something isn't right. Everybody, I need you to
(22:03):
be careful.
After those two months were up,
the markets really essentially collapse, not just the stock market,
but the real estate market as well.
So the reason that I'm telling you all this is
because what happens over a few days or a few
(22:25):
months or whatever it may be is not an investment strategy.
You get also excited when the markets go up or
your stocks go up for two or three days and
then you get also depressed when they go down two
or three days after that.
(22:45):
So as I told you on the webinar, which I'm
still so blown away that essentially 100,000 people watched it
and loved it and you're still requesting, we do it again. No,
we're not going to play it again because it's too
far away from when we did it and things could
be changing here.
So it is important, like I said, in that webinar,
(23:09):
you know, I want all of you to have a
plan and I want you to have a plan, an
investment plan that you stick with and you do not
alter that plan because one week the market is up,
the other week the market is down, interest rates are up,
interest rates are down this and no,
(23:31):
you have a plan
and your plan absolutely should be as follows. The very
first thing that you should be doing is getting yourself
out of credit card debt.
Second thing, maybe it's the 1st and 2nd thing together.
(23:51):
If you have a home equity line of credit, I
want you to do whatever you can to please pay
that off. If you are thinking about getting a home
equity line of credit to do what to possibly do
a remodel or whatever it may be, you are not
to do that. Do you understand me? Not here and
(24:15):
not now
You also really need to have an 8 to 12
month emergency fund. So if you don't have that, you
need to make a plan. How do you start working
on it?
If you work somewhere where they match your contribution to
(24:35):
a retirement plan that you have to do as well
because you cannot pass up free money. Whether it is
a pretax retirement plan, like a traditional 401k or a
Roth 401k that you need to do.
You also need to choose Roth retirement accounts over traditional
(25:00):
retirement accounts no matter what tax bracket you happen to
be in. If you make too much money to qualify
for a contributory, Roth IRA, you can always do a
backdoor Roth. If you are offered a Roth 401k or
403b or TSP at work,
there are no income limitations for that.
(25:25):
So that is your plan overall when it comes to investing,
if you have more than 5 to 7 years, 10 years, preferably
till you need this money.
For those of you who are investing, you are going
to be investing with a dollar cost averaging technique where
(25:48):
every single month you invest in either an exchange traded fund,
mutual funds or a variety of individual stocks as long
as you don't have more than four or 5% in
one stock.
And for those of you who are in retirement
(26:12):
and you are using the money in your retirement accounts
to live on.
It is very important that you have at least 3
to 5 years in cash. Now, when I say in cash,
obviously in some money market fund or whatever earning interest,
(26:32):
but if you need to withdraw money every month or
every six months to live on, you do not want
if these markets go down to have to sell stock
in order to withdraw money when the price of that
stock may be down. So you want 3 to 5
years liquid for yourselves. Why 3 to 5 years?
(26:57):
Because when a market goes from the top to the bottom,
back to the top again, it usually takes 3 to
5 years
And you are not to get afraid.
You're just not to get afraid. Little by little,
(27:18):
you need to get involved with your money.
You know, I used to say when I wrote the
Nine Steps To Financial Freedom, which was the second book
I ever wrote, but the most mega best seller I
ever wrote, which is if you just take one step
towards your money, your money will take nine steps towards
(27:41):
you
And you just start little by little, however, one other
thing I know for sure is it is better to
do nothing than something you do not understand. So you
need to educate yourself before you do anything.
(28:02):
I also know for sure that you better trust yourself
more than you trust others because nobody will care about
your money more than you do. Now with that said,
I have been reading the messages on the Women and
Money app where there is a community and many of
(28:23):
you can just simply go to Apple Apps or Google
Play and download the women and Money app and become
part of that community.
And somebody just a few days ago mentioned that they
know Suze doesn't like financial advisors that charge a lot
of money and blah, blah, blah, blah. How do we
find one?
(28:44):
I want to tell you about financial advisors.
There are many incredible financial advisors out there. Really.
And if you ever find one, they are worth their
weight in gold and you should share that with everybody.
You know, but you have to know without a shadow
(29:04):
of a doubt that that person has your best interest
at heart versus their own. So please don't think that
I simply hate all financial advisor. I do not,
I don't,
But you have to know, do you have one that's
(29:26):
working for you
or do you have one that's working for their own
best interests?
Now, one other thing I know for sure is that
I've been telling you now for about three years that
I really like energy stocks, one and two in particular
(29:49):
that I like actually three that I like in particular. Well,
maybe four now as well as the XLE which is
the ETF for energy stocks
and a lot of you get upset because energy goes up, stocks,
go up, stocks, go down. So I just want to
(30:10):
give you a little Suze School and what I want
you to know for sure when it comes to energy
stocks and oil in particular and why I still like them.
But I also want you to know your entire portfolio
is not to be made up of energy stocks.
(30:34):
You need to have a diversification across the board. And
if you don't know how to buy individual stocks, I
will still tell you there is absolutely nothing wrong with
buying the vanguard total stock market index. ETF or fund
for great diversification.
(30:55):
I still like ETFs such as the Schwab Dividend Fund
as well as the Noble Fund, which is also a
dividend fund because I still think if we go to
a down market here, it's nice to be getting paid
while you wait and our dollar cost averaging into it
(31:16):
as prices go down.
So here's what I want you to know for sure.
When it comes to oil,
oil is usually referred to as W T I.
Somebody wrote on the Women and Money app. I've been
(31:36):
looking up the symbol W T I in the stock
market and I don't understand, I can't find it. W
T I
is not the symbol of a stock, it stands for
West Texas Intermediate Crude.
And that is how the price of oil is referred to.
(32:02):
And it's referred to that because one of the highest
quality of oils
in the United States is found in inland Texas.
And when oil is of a really great quality, it
makes it easier to refine. So years ago, they just
(32:23):
started to quote whatever West Texas Crude Intermediate was going for,
that would be what we would follow and quote as
the price of oil and that's what many people follow today.
So when you hear me say W T I,
(32:43):
I'm talking about West Texas Intermediate Crude and it's selling
for X dollars per barrel now. Right now it's at
about $78 a barrel.
We also know for sure that when W T I
goes up,
(33:04):
the price of most energy companies also go up and
when the price of W T I goes down. So
does the price of most energy companies, the reason being
very simple, when the price of crude goes up,
(33:24):
energy companies are going to make more money. When it
goes down, they're going to make less. What makes the
price of W T I go up and down? Very simple.
It's supply and demand.
When there is more supply than demand, the price will
(33:47):
go down when there is more demand than supply, the
price will go up. Now
it is true that if we hit a recession, are
you writing this all down? This is actually an incredible
Suze School and I get very well that I'm going long,
but these are things you need to know right now.
(34:11):
If we hit a recession, it is probable that the
demand for energy will go down for people will not
have the money to travel, et cetera, et cetera. Ok.
But it is also true
that currently production is way down. It is also true
(34:34):
that OPEC this coming Monday is cutting production by a
million barrels a day. Ok.
It is also true that China could absolutely come back
sooner than later and have great demand for oil again.
(34:56):
And as I think I told you before, the government
is likely to have to restore the supply of the
strategic petroleum reserve
and they are going to have to be buying it.
Now, if you look at supply right now, it is
way down
(35:17):
and most likely we will not be able to meet
the demand come this summer when people start traveling with
airplanes and things like that.
So I think it is absolutely probable
that the price of oil will absolutely go up
(35:40):
because our supply is currently so low. But here's what
I also know for sure
that even at the price levels, that W T I
is right here and right now
these energy companies are making a fortune,
(36:03):
I'm just gonna skip very quickly to why has PXD,
Pioneer Natural Resources, one of my favorite companies that's paying
about a 12% dividend, which is why I had most
of you buy it. Why did the other day did
it go down so dramatically even though it's coming right
(36:25):
back up? And it's simply in my opinion
because the rumor that Exxon was gonna buy them got squashed,
although I'm not so sure that won't happen, even though
I said a little bit ago, I didn't think it
was gonna happen, but something recently happened that made me think, oh,
(36:48):
maybe it is gonna happen. But the reason that it
went down so much is that their CEO, Scott Sheffield,
who is one of the most brilliant CEOs in this
area ever. He once again announced that he was going
to retire January of 2024. Now, he did retire once
(37:11):
in 2016 and came back.
But I think this may be when he really does retire.
And there is a man by the name of Richard
Dealy been the COO forever, Chief Operating Officer, who's gonna
be the CEO and he is quite brilliant as well.
(37:32):
I don't know. Is it possible that Scott is retiring
to make it easier for a takeover by Exxon?
I don't know. Maybe, yes, maybe no. But only time
will tell. But here's what I still know is that
it's a great company, it will continue to go up
(37:53):
and down, which is why the main reason I wanted
you to buy it was why because of the dividend.
Ok. Those are the things that I know for sure.
And those are the things that I know for sure
that I want you to know. I want you to
(38:15):
be diversified. I want you to stick to a plan.
I want you to be very realistic that things in
the United States every single week seem to be signaling
that something is radically wrong. Next week, we will absolutely
see if Powell raises the Fed funds rate again, which
(38:37):
of course, he's going to, but we'll see what is
it that he says he's going to do in the
future and that will have a big effect on the
market as well.
So
the other thing that I know for sure, without a
shadow of a doubt
is that if you simply say every single day that
(39:03):
today wherever I go, I will create a more peaceful,
joyful and loving world.
I know for sure that you will be unstoppable. See
you Thursday, everybody for another Ask Suze and KT Anything.
MUSIC (39:26):
Music Out.
April 30th 2023. Welcome everybody to the women and Money
podcast as well as everybody smart enough to listen. So
today is Suze School and today I want to talk
about what I know for sure
(00:51):
with things that have happened in the economy as well
as touching a little bit on oil and P X
D because I know all of you want to know
about it. I am not going to be talking about
series I Bonds today. Even though I know that the
rate is at 4.3% the fixed rate is at 0.90
(01:14):
and everything, I haven't changed my mind about it
so we can talk about it a little bit if
you want to next week. But really there's not much
more that I want to say. And the reason is
especially as I go through what I know for sure.
I know for sure. I want my money to be
(01:35):
liquid and I can get at it when I know
I can get at it and not have to wait
for a period of time to do so. So that's
just as simple of an explanation as I could give
you as to why I'm sticking by what I talked
about before when it came to Series I Bonds.
(01:57):
So, what do I know for sure when it comes
to the economy right here and right now?
This is not a heavy Suze school,
but it's really what is going on and what I
know for sure and what you should know for sure
about this economy.
(02:19):
So get out your Suze notebooks. I wanna start with
the banking system and regional banks because you know, it
wasn't that long ago, what was it? March 10th when
Silicon Valley Bank went under, when Signature Bank went under,
(02:42):
when Silver Gate went under.
I know for sure as you know, for sure, three
banks went under and we also know that the people
who had money in those banks
that were over the FDIC insurance limit for whatever reason,
(03:04):
the FDIC, the government and everybody decided that we were
going to make them whole, even if they were over
the FDIC insurance limit. Ok, whether that was wise or
not only time will tell.
But what's really important to understand
(03:27):
is that just because they did that with those three
banks does not mean on any level that they are
going to do it with other banks that fail.
And what I also know for sure is, oh, other
banks are going to fail. There is no way that
(03:49):
those are the only three banks that are going to fail.
In fact, we'll talk about that in one second
For we also know that as of last Friday, all
this information came out and said that the reason those
banks failed was because of management error.
(04:14):
The people who were in charge of those banks mismanaged
the funds. And that is the reason that they failed.
And I know for sure that the reason that they
were able to mismanage those funds is because back in 2018,
the regulations were absolutely lifted to make it easier for
(04:40):
banks to do what banks did when it came to
lending and all kinds of things.
And that because those regulations were lifted, that also contributed
to why those banks failed because the management were allowed
to do things that they weren't allowed to do before 2018.
(05:06):
Now, I also know for sure
that as of last Friday, First Republic Bank is most
likely going to also go into receivership and have to
be bailed out by the FDIC.
What we don't know however is that if this time,
(05:28):
as I mentioned just a little bit ago, for those
people who had more money and First Republic than the
FDIC limits, if everybody's gonna step in and say you'll
be insured as well. Somehow I have a feeling they're
not going to.
Now, I just want to put a pin in this
(05:49):
for a second and talk about First Republic Bank,
Because First Republic Bank was touted
as the bank, if you have a business
you should go to. They were like the number one
bank and they weren't just a regional bank, even though
(06:10):
they were in San Francisco, they were in New York.
They were a fabulous fabulous bank or so I thought
or so Miss Travis thought because everybody, First Republic Bank
was our bank,
The majority of our liquid cash for our businesses for
(06:35):
how we ran everything went through First Republic Bank.
Now, I'm telling you this because I also want to
tell you what I know for sure, which is the
goal of money is for you to be secure.
So it was around February 7th. I think that's around
(06:59):
when it was that First Republic Bank, because we had
money in that bank, I followed the price of the
stock very carefully.
And First Republic Bank was about, I think $140 a share.
And all right, it was down still quite a bit,
(07:20):
but all right, $140 a share was still a respectable price.
And as I was watching it, right, it was a
month later, now it was March 7th
and the price went from a month earlier, 140 down
to 115.
(07:41):
And I was like, I'm not quite liking this KT. Now,
remember again, it was on March 10th, that Silicon Valley
Bank announced they were caput. Ok.
So now we're at March 9th, right? When everybody knew
(08:02):
that Silicon Valley Bank was gonna go under right around there.
And now First Republic is at 96
on March 13th, it was at $31 a share and Friday,
it was at $2 a share.
So the reason that I'm telling you this is that
(08:25):
because we were customers of First Republic Bank, we started
to get letters and emails saying there is nothing to
worry about. We're fine. You don't need to take your
money out, don't worry about it. And I said to KT,
KT I want all the money out of that bank now.
And she said, oh, Suze, I'm gonna leave my money
(08:48):
in that bank because I like that bank. That's my
checking account. I have checks here and nothing's gonna happen
to it and it's ok. And I said KT
I'm gonna overrule you on this and I'm putting in
instructions that every single penny that we have in there
needs to come out. And a few days later it
(09:13):
was out.
But KT kept saying, Suze, can't, we just leave a
little money in there. I like that bank. It's such
a good bank.
Banks are not friends. Credit unions are not friends either.
(09:33):
It's not about, do you like them? Do you not
like them?
It's, do you feel secure with your money in them?
And once rumors start, you have to pay attention to
those rumors. That's what I know for sure. And sure
(09:53):
enough here we are
like April 28th, 29th and First Republic Bank is going under.
I want you to think about that for a second.
So it's really, really important
(10:13):
that you make sure that your money is someplace that
you feel secure and that you feel safe and sound
again. Do I have money at Alliant Credit Union? Does
KT have money at Alliant Credit Union? Absolutely. Because I
(10:34):
do feel safe and sound there.
One thing I know for sure is that I do
not want all of you,
And I said this before, but it's really important to
just keep going for the highest little interest rate here
or there and switching your money all the time.
(10:56):
So what I know for sure is that a lot
of you are looking around and going, I can get
a quarter of a point more here. I can get
a half a point more there or whatever it may be.
Just understand.
the most important thing is not the interest rate that
you're getting, although you want to get a good interest rate,
(11:21):
but you never want your financial institution to stretch to
get a high return simply to do what? Attract customers
And that's exactly in many ways what Silicon Valley Bank
was doing, making good offers that they shouldn't have been
making and on and on. So I know for sure
(11:46):
that you want to know where you are
is safe and sound and you are absolutely invested under
the FDIC limits depending how you have used them because
obviously you can have more than $250,000 if in fact,
(12:07):
you are using it correctly. Same holds true with credit unions. However,
they are insured by NCUA, banks FDIC. Ok,
let's continue. Now,
what I also know for sure
is that stimulus checks and easy money lending
(12:31):
and the very low interest rates of a few years
ago enticed so many of you into buying a truck
or car that you really could not afford. I cannot
even begin to believe how many people I have talked
to lately that have purchased a truck or car that are,
(12:55):
that co is costing them like $80,000
at an average payment of 700 to $1000 a month
that they've financed over 7 to 10 years. Like, are
you kidding me?
(13:16):
I also know that many of those loans now are
60 or more days past due. In fact, the past
due payments on cars and trucks are the highest rate
that they have been since 2006.
(13:39):
And we all know what started to happen in 2006.
Don't we? If you don't, you better look up history
of what went on in 2006, 2007, 2008, 2009.
It was horrific on every possible level. I also know
(14:03):
for sure
that the most important bill
that every one of you who owns a home, a
home that you live in a single family residence, that
the most important bill that you pay every single month
is your mortgage payment. And why is that? Because you
(14:26):
don't want to lose your home?
And what I also know for sure
is that now mortgage payments,
the delinquency of mortgage payments just like with car loans
are starting to increase and increase and increase.
(14:47):
I also know for sure that the delinquency rate of
credit cards are increasing so fast. I can't even tell
you especially those that are 90 days late
or more.
All right. Now, what's really important about that? Is that
(15:09):
all creditors wait
until you are 90 days late with a payment for
them to crack down on you hard and once you
are late for 90 days or more, that dings your
credit score or your FICO score, which is really the
(15:32):
only one that matters.
It dings it more than anything.
And when it dings it, you may think that oh,
if I just simply pay it off in full and
bring it current or whatever, that will help my FICO score,
it will not
(15:52):
if you are late on payments, you are far better off,
write this down. You are far better off bringing your
payments up to where they should be on late payments
that are 20 days, late, 30 days, late, 60 days late.
But don't even bother on those that are 90 days
(16:13):
late or more because they're not gonna help your FICO
score at all. Does that surprise all of you probably does.
So, what do I do with the information that I
know for sure.
Well, first of all, I pass it on to you
because I want you to keep everything in perspective.
(16:39):
I don't want you to just get caught up in
the ups and the downs of the market that everybody
may be saying to you. It's ok. The economy is
doing good. Maybe we're gonna have a soft landing, don't
worry about it. Just keep spending, spending, spending,
You know, I'll never forget the time that I was
(17:00):
on a morning show
and it was right around 2007, 2008.
And I was telling everybody to stop spending money, stop it. Everybody,
you need to save your money, you need to pay
down your credit card a lot. Like what I'm telling
(17:21):
you right now
And then what happened was they went on to their
next guest, but I was still on and I could
hear them
and I heard the next guest say absolutely wrong, Suze
Orman is wrong.
You all need to keep stimulating this economy. If you
(17:42):
stop spending, you're gonna hurt the economy, everything will go down.
So keep spending everybody. Otherwise we're gonna have a problem
and I'll never forget asking the producer who was still
talking to me about something else. And I said to him,
can you let me go back on the air?
(18:03):
I need to tell that person what I think and
I'll never forget going back on and saying, what are
you talking about?
You care more about the economy and people getting in
debt and keeping things going so everything can seem ok
versus making sure that they are ok.
(18:23):
You have to make sure that they're ok and it's
my job to make sure that every one of you
is ok.
Which means I really want you to start conserving your money. Now.
I've been telling you this for a while now,
but I know for sure that something is not right
(18:48):
in this economy. I just gave you a few things
that I wanted you to know that I know and
I'm gonna tell you a little bit more how that
all plays out.
But I want you to take this seriously.
I want you to not think, oh, the summer months
are coming and let's go on vacation and it's ok.
(19:08):
Let's do this, let's do that. You can do all
those things. I don't have a problem with that, but
you better be out of credit card debt. You absolutely
better be having an 8 to 12 month emergency fund.
You better have your home equity line of credits paid
off and you better know
(19:29):
that your job is absolutely secure because the other thing
I know for sure is that so many companies are
laying off 4000 people here, 5000 people there. I really
want you to know for sure
that you have everything the way you need to have
(19:53):
it for you to be secure no matter what happens. Now,
I don't know what's gonna happen. I can tell you that,
but I know for sure
that things aren't quite right now. A lot of you
write me and you're watching like this last week, the
(20:13):
market go down 300 points one day and then you
see it go up 500 again up on Friday. And
you hear me give this webinar where I say, I
absolutely think it's possible
that these markets could go down another 15 or 20%
but I don't know when that's gonna happen,
(20:35):
but you will see them go up and down in
the meantime. May I remind all of you that back
in 2008? It was mid March. I don't think March
is a good time for this economy anyway, it was 2008,
mid March when Bear Stearns, one of the most prestigious
(20:57):
brokerage firms went under
and when it went under, it was taken over by
JP Morgan
and after JP Morgan, which is one of the largest
banks out there took it over. Everybody felt like, oh,
that's over. Everything's ok. We don't have to worry a
(21:19):
little bit like everybody was feeling after SVB and everybody
else went under until maybe last Friday when First Republic
went under. But everybody was feeling great
and right after that, the Standard and Poor's 500 index
(21:41):
over the next two months, ran up 15%.
Everybody was so happy. Well, Suze Orman was still on CNBC,
saying what I'm telling you now, what I know for sure,
which is something isn't right. Everybody, I need you to
(22:03):
be careful.
After those two months were up,
the markets really essentially collapse, not just the stock market,
but the real estate market as well.
So the reason that I'm telling you all this is
because what happens over a few days or a few
(22:25):
months or whatever it may be is not an investment strategy.
You get also excited when the markets go up or
your stocks go up for two or three days and
then you get also depressed when they go down two
or three days after that.
(22:45):
So as I told you on the webinar, which I'm
still so blown away that essentially 100,000 people watched it
and loved it and you're still requesting, we do it again. No,
we're not going to play it again because it's too
far away from when we did it and things could
be changing here.
So it is important, like I said, in that webinar,
(23:09):
you know, I want all of you to have a
plan and I want you to have a plan, an
investment plan that you stick with and you do not
alter that plan because one week the market is up,
the other week the market is down, interest rates are up,
interest rates are down this and no,
(23:31):
you have a plan
and your plan absolutely should be as follows. The very
first thing that you should be doing is getting yourself
out of credit card debt.
Second thing, maybe it's the 1st and 2nd thing together.
(23:51):
If you have a home equity line of credit, I
want you to do whatever you can to please pay
that off. If you are thinking about getting a home
equity line of credit to do what to possibly do
a remodel or whatever it may be, you are not
to do that. Do you understand me? Not here and
(24:15):
not now
You also really need to have an 8 to 12
month emergency fund. So if you don't have that, you
need to make a plan. How do you start working
on it?
If you work somewhere where they match your contribution to
(24:35):
a retirement plan that you have to do as well
because you cannot pass up free money. Whether it is
a pretax retirement plan, like a traditional 401k or a
Roth 401k that you need to do.
You also need to choose Roth retirement accounts over traditional
(25:00):
retirement accounts no matter what tax bracket you happen to
be in. If you make too much money to qualify
for a contributory, Roth IRA, you can always do a
backdoor Roth. If you are offered a Roth 401k or
403b or TSP at work,
there are no income limitations for that.
(25:25):
So that is your plan overall when it comes to investing,
if you have more than 5 to 7 years, 10 years, preferably
till you need this money.
For those of you who are investing, you are going
to be investing with a dollar cost averaging technique where
(25:48):
every single month you invest in either an exchange traded fund,
mutual funds or a variety of individual stocks as long
as you don't have more than four or 5% in
one stock.
And for those of you who are in retirement
(26:12):
and you are using the money in your retirement accounts
to live on.
It is very important that you have at least 3
to 5 years in cash. Now, when I say in cash,
obviously in some money market fund or whatever earning interest,
(26:32):
but if you need to withdraw money every month or
every six months to live on, you do not want
if these markets go down to have to sell stock
in order to withdraw money when the price of that
stock may be down. So you want 3 to 5
years liquid for yourselves. Why 3 to 5 years?
(26:57):
Because when a market goes from the top to the bottom,
back to the top again, it usually takes 3 to
5 years
And you are not to get afraid.
You're just not to get afraid. Little by little,
(27:18):
you need to get involved with your money.
You know, I used to say when I wrote the
Nine Steps To Financial Freedom, which was the second book
I ever wrote, but the most mega best seller I
ever wrote, which is if you just take one step
towards your money, your money will take nine steps towards
(27:41):
you
And you just start little by little, however, one other
thing I know for sure is it is better to
do nothing than something you do not understand. So you
need to educate yourself before you do anything.
(28:02):
I also know for sure that you better trust yourself
more than you trust others because nobody will care about
your money more than you do. Now with that said,
I have been reading the messages on the Women and
Money app where there is a community and many of
(28:23):
you can just simply go to Apple Apps or Google
Play and download the women and Money app and become
part of that community.
And somebody just a few days ago mentioned that they
know Suze doesn't like financial advisors that charge a lot
of money and blah, blah, blah, blah. How do we
find one?
(28:44):
I want to tell you about financial advisors.
There are many incredible financial advisors out there. Really.
And if you ever find one, they are worth their
weight in gold and you should share that with everybody.
You know, but you have to know without a shadow
(29:04):
of a doubt that that person has your best interest
at heart versus their own. So please don't think that
I simply hate all financial advisor. I do not,
I don't,
But you have to know, do you have one that's
(29:26):
working for you
or do you have one that's working for their own
best interests?
Now, one other thing I know for sure is that
I've been telling you now for about three years that
I really like energy stocks, one and two in particular
(29:49):
that I like actually three that I like in particular. Well,
maybe four now as well as the XLE which is
the ETF for energy stocks
and a lot of you get upset because energy goes up, stocks,
go up, stocks, go down. So I just want to
(30:10):
give you a little Suze School and what I want
you to know for sure when it comes to energy
stocks and oil in particular and why I still like them.
But I also want you to know your entire portfolio
is not to be made up of energy stocks.
(30:34):
You need to have a diversification across the board. And
if you don't know how to buy individual stocks, I
will still tell you there is absolutely nothing wrong with
buying the vanguard total stock market index. ETF or fund
for great diversification.
(30:55):
I still like ETFs such as the Schwab Dividend Fund
as well as the Noble Fund, which is also a
dividend fund because I still think if we go to
a down market here, it's nice to be getting paid
while you wait and our dollar cost averaging into it
(31:16):
as prices go down.
So here's what I want you to know for sure.
When it comes to oil,
oil is usually referred to as W T I.
Somebody wrote on the Women and Money app. I've been
(31:36):
looking up the symbol W T I in the stock
market and I don't understand, I can't find it. W
T I
is not the symbol of a stock, it stands for
West Texas Intermediate Crude.
And that is how the price of oil is referred to.
(32:02):
And it's referred to that because one of the highest
quality of oils
in the United States is found in inland Texas.
And when oil is of a really great quality, it
makes it easier to refine. So years ago, they just
(32:23):
started to quote whatever West Texas Crude Intermediate was going for,
that would be what we would follow and quote as
the price of oil and that's what many people follow today.
So when you hear me say W T I,
(32:43):
I'm talking about West Texas Intermediate Crude and it's selling
for X dollars per barrel now. Right now it's at
about $78 a barrel.
We also know for sure that when W T I
goes up,
(33:04):
the price of most energy companies also go up and
when the price of W T I goes down. So
does the price of most energy companies, the reason being
very simple, when the price of crude goes up,
(33:24):
energy companies are going to make more money. When it
goes down, they're going to make less. What makes the
price of W T I go up and down? Very simple.
It's supply and demand.
When there is more supply than demand, the price will
(33:47):
go down when there is more demand than supply, the
price will go up. Now
it is true that if we hit a recession, are
you writing this all down? This is actually an incredible
Suze School and I get very well that I'm going long,
but these are things you need to know right now.
(34:11):
If we hit a recession, it is probable that the
demand for energy will go down for people will not
have the money to travel, et cetera, et cetera. Ok.
But it is also true
that currently production is way down. It is also true
(34:34):
that OPEC this coming Monday is cutting production by a
million barrels a day. Ok.
It is also true that China could absolutely come back
sooner than later and have great demand for oil again.
(34:56):
And as I think I told you before, the government
is likely to have to restore the supply of the
strategic petroleum reserve
and they are going to have to be buying it.
Now, if you look at supply right now, it is
way down
(35:17):
and most likely we will not be able to meet
the demand come this summer when people start traveling with
airplanes and things like that.
So I think it is absolutely probable
that the price of oil will absolutely go up
(35:40):
because our supply is currently so low. But here's what
I also know for sure
that even at the price levels, that W T I
is right here and right now
these energy companies are making a fortune,
(36:03):
I'm just gonna skip very quickly to why has PXD,
Pioneer Natural Resources, one of my favorite companies that's paying
about a 12% dividend, which is why I had most
of you buy it. Why did the other day did
it go down so dramatically even though it's coming right
(36:25):
back up? And it's simply in my opinion
because the rumor that Exxon was gonna buy them got squashed,
although I'm not so sure that won't happen, even though
I said a little bit ago, I didn't think it
was gonna happen, but something recently happened that made me think, oh,
(36:48):
maybe it is gonna happen. But the reason that it
went down so much is that their CEO, Scott Sheffield,
who is one of the most brilliant CEOs in this
area ever. He once again announced that he was going
to retire January of 2024. Now, he did retire once
(37:11):
in 2016 and came back.
But I think this may be when he really does retire.
And there is a man by the name of Richard
Dealy been the COO forever, Chief Operating Officer, who's gonna
be the CEO and he is quite brilliant as well.
(37:32):
I don't know. Is it possible that Scott is retiring
to make it easier for a takeover by Exxon?
I don't know. Maybe, yes, maybe no. But only time
will tell. But here's what I still know is that
it's a great company, it will continue to go up
(37:53):
and down, which is why the main reason I wanted
you to buy it was why because of the dividend.
Ok. Those are the things that I know for sure.
And those are the things that I know for sure
that I want you to know. I want you to
(38:15):
be diversified. I want you to stick to a plan.
I want you to be very realistic that things in
the United States every single week seem to be signaling
that something is radically wrong. Next week, we will absolutely
see if Powell raises the Fed funds rate again, which
(38:37):
of course, he's going to, but we'll see what is
it that he says he's going to do in the
future and that will have a big effect on the
market as well.
So
the other thing that I know for sure, without a
shadow of a doubt
is that if you simply say every single day that
(39:03):
today wherever I go, I will create a more peaceful,
joyful and loving world.
I know for sure that you will be unstoppable. See
you Thursday, everybody for another Ask Suze and KT Anything.
MUSIC (39:26):
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