Suze: January 19, 2025. Welcome everybody to the Women and Money
Suze: podcast as well as everybody smart enough to listen. Suze
Suze: O here.
Suze: And today is Suze's school, so get out your little notebooks. First,
Suze: thank you, thank you, thank you for all the tremendous
Suze: amount of emails that I got, thanking me for last
Suze: Sunday's podcast and the Sunday before that's podcast, and how
Suze: much it helped you.
Suze: You listened to those podcasts, but did you do what
Suze: I asked you to do in those podcasts, especially the
Suze: 12 weeks ago? Did you go around to your home
Suze: and photograph everything? Did you get a box? Did you
Suze: put everything in it, blah blah blah blah blah. Did you?
Suze: Many of you wrote me and said you did.
Suze: However, if you didn't, my question to you is, why not? oh, oh,
Suze: I know.
Suze: I'm sure life's excuses got in your way. You had time,
Suze: of course, to look at your favorite Netflix show that
Suze: just came out or to go to movies or go
Suze: out to eat or play with it, whatever it may be.
Suze: Life's excuses got in the way.
Suze: But your entire life
Suze: is lived in that home.
Suze: And so there should be no excuse big enough to
Suze: keep you from doing everything I asked you to do
Suze: two weeks ago.
Suze: I'm sure if we could turn back the hands of time.
Suze: That many of the people who lost their homes and
Suze: everything in it.
Suze: Could have listened to that podcast a long time ago.
Suze: Would have done everything I asked them to do, and
Suze: they'd be in a whole lot better situation right now.
Suze: Now, when it comes to real estate, which is what
Suze: I want this podcast to be about.
Suze: Many of you believe
Suze: that real estate is the absolute best investment out there.
Suze: And when I ask you, for those of you who
Suze: tell me that and I get to talk to you personally, well,
Suze: what other investments do you have? I go, do you
Suze: at least have a Roth IRA or an IRA or
Suze: something like that? They go, Oh yeah, we have an IRA,
Suze: but we have a real estate IRA where we bought
Suze: a home within our IRA. So I said, wait, wait, wait, wait,
Suze: are you telling me.
Suze: That every penny of your investable assets are in real estate.
Suze: Yes, isn't that great? Do you have any idea, Suze,
Suze: how much money we're up? It has been the best
Suze: investment out there, bar none.
Suze: And I go, so you own no stocks or bonds
Suze: or anything like that?
Suze: Not even gold or even a little Bitcoin. No, we
Suze: only own real estate.
Suze: Right, I want you all to listen to me right now.
Suze: It is really important that not all of your money
Suze: is invested in one asset category.
Suze: It is not OK to have 100% of your money
Suze: invested in just real estate. It is not OK to
Suze: have 100% of your money invested in the stock market.
Suze: It is not OK to have 100% of your money,
Suze: believe it or not, invested in bonds. It is not
Suze: OK to have 100% of your money invested in gold, Bitcoin,
Suze: and so on. Do you hear me?
Suze: You need to make sure that you have put your
Suze: little investment hose in almost every single one of those
Suze: categories that make sense to you and your situation, but
Suze: not all your money in one.
Suze: I've told you this story before, but I'm going to
Suze: tell it to you again. When I was actually seeing
Suze: clients from the Suze Orman Financial Group, this woman came in.
Suze: She had 3 homes in the San Francisco hills. That
Suze: is all she had. She owned them outright.
Suze: I talked to her about diversifying. These were multi-million dollar homes.
Suze: She said, no, no, the rent, everything on them, it's
Suze: absolutely great. No problem, Suze. I'm doing fine.
Suze: And I said, OK.
Suze: And of course there was torrential rains that came to
Suze: the hills. All three of her homes actually slid down
Suze: the hill, and they were destroyed.
Suze: Now whether she got I don't know her insurance money
Suze: for them or not, but she did lose during that
Suze: time the rental income. She then didn't have access to
Suze: any of those homes. Her whole security blanket.
Suze: Totally came uncovered.
Suze: And exposed her to not having at that moment in
Suze: time any net worth at all.
Suze: So I don't want that to happen to all of you.
Suze: But even more so than back then when that happened
Suze: to her, real estate is a changing everybody, and I
Suze: think it's changing in a way that
Suze: I never expected it to change, and how is that?
Suze: So let's put a pin in that for a second
Suze: and let's just go back to these fires in LA.
Suze: Now these wildfires in LA have not been the only
Suze: serious devastation that has happened within the United States. There
Suze: have been many wildfires. There have been many tornadoes. There
Suze: have been many hurricanes, and all of these things, the floods, everything.
Suze: Have really put insurance companies under pressure and a lot
Suze: of you tend to think well didn't happen to me.
Suze: I'm fine. My house is fine, doesn't matter.
Suze: The cost of these losses from insurance companies you in
Suze: my opinion, are going to feel them no matter what,
Suze: whether you were close to those fires, not close to
Suze: those fires, we're all going to feel it. So let
Suze: me just give you an example of what's happening in LA.
Suze: As you know, over the past years there, because of
Suze: many of the wildfires and the devastations that they've had many,
Suze: many insurance companies have absolutely pulled out of insuring people
Suze: in the Pacific Palisades in many areas in Los Angeles
Suze: and really throughout California.
Suze: The hurricanes in Florida have done the same to insuring
Suze: people in Florida here, so they have either done two things.
Suze: They have totally pulled out, and they no longer will
Suze: insure here. Or if they do insure here, premiums have
Suze: gone up anywhere from 35% to 50%, so high.
Suze: That many people who own their homes outright can't afford
Suze: to live in their homes anymore because of the increase
Suze: in insurance.
Suze: It is true that when insurance companies refuse to insure you,
Suze: you can't get insurance anywhere.
Suze: I told you about the fair access to insurance requirements,
Suze: which happens to be the fair FAIR insurance for those
Suze: of you who cannot get insurance anywhere.
Suze: Now this phenomenon that's happening and happened in LA, Florida,
Suze: all kinds of places is something that really affects us all.
Suze: When it comes to purchasing or owning real estate.
Suze: So for those of you now, and let's just go
Suze: straight to real estate, let's get off insurance for a
Suze: second here. For those of you who want to buy
Suze: a home, you want to get into the real estate market,
Suze: whatever it may be, you have two things right now
Suze: in my opinion that are really working against you. Number 1,
Suze: mortgage rates are back above 7%.
Suze: I really, really believed that I was going to be
Suze: able to tell you sometime this year, guess what, you
Suze: could get a 30 year mortgage for 5.5%. We're above 7% again.
Suze: That's number one. Number 2, when insurance companies have losses
Suze: like we see with reinsurance and everything that has gone
Suze: on with the change and how insurance can bill their
Suze: customers now for their losses, believe it or not.
Suze: Your insurance premiums are not only going to be high,
Suze: they're going to be seriously higher as time goes on,
Suze: in my opinion.
Suze: So in order to own a home where you can't
Suze: afford to pay for it outright, which is like 99.5%
Suze: of everybody.
Suze: In order to get a mortgage you're only gonna be
Suze: able to get a mortgage if in fact you can
Suze: get insurance so in figuring out what it's gonna cost
Suze: you to own a home, you now can't look at
Suze: what the insurance is currently costing maybe the people who
Suze: own that home you need to look at what it's
Suze: going to cost you if you bought it today.
Suze: In your situation, and I would only buy a home
Suze: if I knew I could afford at least a 30
Suze: to 50% increase in my insurance premiums over time. That
Suze: is number one.
Suze: Number 2, remember when you buy a home, property taxes
Suze: can go up any time, and if the state happens
Suze: to start being responsible for paying some of the losses
Suze: and coming up with money when there is insurance shortfalls
Suze: to be able to repair a community.
Suze: Don't be surprised if you don't see your property taxes
Suze: increased tremendously as well.
Suze: And number 3.
Suze: Your mortgage interest rate has to be figured into it
Suze: now when all of these things are put together.
Suze: It may mean for many people.
Suze: That renting is going to be more affordable and a
Suze: better choice, believe it or not, than owning a home
Suze: because people can't afford to own a home.
Suze: I just want you to know that these are things
Suze: that you need to take in consideration before you're just
Suze: somebody who goes, I need to buy a home. I
Suze: have to buy a home. Oh my God, I can't rent.
Suze: If I'm renting, I'm gonna be a renter for my
Suze: entire life and I'm just gonna throw all that money
Suze: away and stop, just stop.
Suze: Depending on what happens with natural disasters, the insurance companies,
Suze: and interest rates.
Suze: If you need to rent, then rent.
Suze: Owning a home is not the key to absolutely being
Suze: financially secure.
Suze: Now I get that many of you think it's the key.
Suze: In fact, not so long ago I was interviewed on
Suze: a podcast that most likely will never air because I
Suze: kind of disagreed with the interviewer on almost everything.
Suze: But she was asking me about younger people today and
Suze: how they'll never be able to afford to buy a home,
Suze: and I said, yeah.
Suze: And she said, well, what can they do? And then
Suze: I gave her my typical example that you've heard me
Suze: say a million times, where they could open up a
Suze: Roth IRA when they're in their 20s, put $100 a
Suze: month away.
Suze: Every single month from like 25 to 65 and with 12%
Suze: annual average rate of return in the stock market which
Suze: is absolutely possible over all that period of time remember
Suze: an annual average rate of return everybody is not.
Suze: Interest rate, not like you lock in 12%. Markets go
Suze: up 30% 1 year, down 40%, whatever it is, but
Suze: over a long period of time it can average, let's
Suze: say 12% annually when you average it over 40 years.
Suze: I said they'd have a million dollars.
Suze: And in a Roth IRA that's tax free. If they
Suze: put in more than that, I think if they were
Suze: able to put in $300 a month or $500 a
Suze: month or whatever it may be, and she says to me,
Suze: but Suze, what good's that gonna do them if they
Suze: don't have a home?
Suze: And that's where our disagreement started, which was, are you
Suze: telling me you rather have them own a home than
Suze: have a million dollars or $5 million in a retirement account?
Suze: And she essentially was like, yeah, without owning a home,
Suze: what good is that money going to do them? She
Suze: actually said that to me, OK, she actually said that
Suze: to me.
Suze: Well, the interview was totally downhill from that point on.
Suze: The point of why I'm telling you this is I
Suze: don't want your dream to be you have to be
Suze: a homeowner in order to be financially independent. You do not.
Suze: You simply have to live a life where you have
Suze: an emergency account. You have a big retirement account, you
Suze: have things you're totally out of debt. You're living below
Suze: your means but within your needs, and you may be
Suze: a renter.
Suze: Now when you're a renter, there's really nothing wrong with that,
Suze: and that may become the wave of the future. I
Suze: don't know if it will or it won't.
Suze: But the truth of the matter is before you buy
Suze: a piece of real estate today.
Suze: You seriously need to think twice about it if you
Suze: can afford it. I went back and I just thought
Suze: it would be interesting to see.
Suze: If people are happy that they bought a house a
Suze: year or two ago and there is a house power
Suze: report which is a survey of US homeowners that has
Suze: a very revealing insight to the challenges of home ownerships
Suze: as well as their priorities in the years to come.
Suze: I just want to read you this because it's important
Suze: that you understand.
Suze: You can always do something, but once you've done it,
Suze: all right, are you gonna be happy you did it
Suze: or not?
Suze: So
Suze: 83% of the homeowners had to deal with unexpected repairs
Suze: last year.
Suze: And that is up from 46% in the year 2023.
Suze: What were those unexpected repairs, water damage, roof damage, window
Suze: or door issues were the most common everybody of all
Suze: the problems. Now about half of that 83% of homeowners
Suze: spent $5000 out of pocket on unexpected home repairs in 2024.
Suze: And obviously I want you to pay attention to that
Suze: because the other thing is if something happens you have
Suze: water damage you have roof damage and you make a
Suze: claim to your insurance company if you make a claim,
Suze: chances are your insurance company is going to drop you.
Suze: I was told because we had water damage in our
Suze: condo from a leak in a pipe that if I
Suze: made a claim they would cover the claim but they
Suze: would absolutely drop me and if they drop you good
Suze: luck getting insurance anywhere. I just want you to think
Suze: about that.
Suze: So why am I telling you? Because you have to
Suze: have now when you buy a home, given what's happened
Suze: with insurance that you have to have a maintenance fund
Suze: for your home besides an emergency account for yourself, you
Suze: need one for your home for unexpected damages, so you
Suze: better at least when you buy a home, be able
Suze: to put $300 to $400 a month.
Suze: In a maintenance fund for repairs when something goes wrong
Suze: with that home so you don't have to make a
Suze: claim on your insurance just saying everybody, then it's always
Suze: interesting to me when somebody buys a home, do they
Suze: have regrets?
Suze: The study found out that 73% of homeowners expressed regret
Suze: about their home purchase in 2024.
Suze: Did you hear what I just said, and what was
Suze: their number one regret? Unexpected maintenance issues.
Suze: All right.
Suze: Think about that. What's interesting is that.
Suze: 59% of those homeowners who expressed regrets are saying they
Suze: plan to move in 2025 and just get out of it.
Suze: There's a saying of learn from other people's mistakes rather
Suze: than you experience it on your own.
Suze: Obviously I'm still an advocate of home ownership.
Suze: But only, only if you can afford it, just that simple, everybody.
Suze: Let's talk a little bit about the stock market and
Suze: really what I hoped you learned the past week or two.
Suze: It is very, very important that when you are investing
Suze: in the stock market.
Suze: That you absolutely are doing it with dollar cost averaging
Suze: doing little by little over time and taking advantage of
Suze: when a stock that's a great stock happens to tank.
Suze: Now one of my favorite stocks out there is IONQ,
Suze: which is a quantum computing company.
Suze: And I gave you that stock a week or so
Suze: ago for a long term hold, and I said to
Suze: everybody when I gave you a list of the stocks
Suze: that when they go down you need to buy more.
Suze: So news came out by the CEO of NVIDIA where
Suze: he said people have quantum computing wrong and it's gonna
Suze: be 30 years before you can see profits with quantum
Suze: computing and when he said that IONQ immediately went down
Suze: almost 50%. It tanked on January 6th it was at
Suze: about $51 a share.
Suze: And then before you knew it on January 8th, it
Suze: was at like $30 a share. It went down bam.
Suze: Just on that news, I, on the other hand, as
Suze: soon as it went down, what did I do? I
Suze: went in and I bought more. Since that time, it
Suze: has come back to about $40 a share, but for
Suze: many of you you wrote me and you said, Suze,
Suze: this stock is down almost 50%. Now what do I do?
Suze: You are not to be paralyzed like that, people, if
Suze: you do own a stock.
Suze: That's a good quality stock and it happens to go
Suze: down on the news of others.
Suze: Guess what? Just buy more. So I felt like I
Suze: was given a gift by being able to get into
Suze: that stock again when it was down so much. So
Suze: even the indexes, everybody at one point last week or
Suze: whenever it was now went down significantly hundreds and hundreds
Suze: of points. Then the next day, the day after, it
Suze: went back up again.
Suze: So what did I tell all of you? I told
Suze: you that this year is going to be a year
Suze: of extremes up and extremes down, and your job is
Suze: to take advantage of the extreme downs, not to sell.
Suze: But to take advantage of the extreme downs by having
Suze: enough cash on hand so you don't put all your
Suze: money to work at once that you have to invest
Suze: in the market, including your retirement accounts you have enough
Suze: on the sidelines so when you have these extreme downs
Suze: you're able to go in and pick up a little more.
Suze: Not a whole lot more, but a little more because
Suze: you never know it could continue to go down up
Suze: down up down. So this is the year that you
Suze: are to buckle in and expect extreme ups and extreme downs,
Suze: and that's even true with Bitcoin. Now, as I told you,
Suze: I thought it was very possible that Bitcoin could go
Suze: back down support level of 87, so it went down
Suze: to about 90,000.
Suze: All right, you could have picked up a little bit there.
Suze: It's back up like at 104,000, but even Bitcoin and
Suze: everything is going to be going up and down, just
Suze: so you know. Now gold.
Suze: Gal looks like it is all staged and ready to
Suze: possibly break out to go up to about 3000 and beyond,
Suze: so we'll have to see what that happens. But the
Suze: point of me telling you all this is that everything
Suze: has a cycle where it goes up, down, up, down, up, down.
Suze: Your job when it comes to investing and things you
Suze: need to do.
Suze: Is to know what you want to own.
Suze: Know why you want to own it.
Suze: And then stick with it, just stick with it. Don't
Suze: get afraid just stick with it, but take advantage of
Suze: it when it goes down by $1 cost averaging, OK,
Suze: so this podcast today is really about.
Suze: Just take your time right now.
Suze: Before you buy anything from real estate to stocks to
Suze: exchange traded funds, understand how these markets are working now
Suze: understand how real estate and the cost of owning real
Suze: estate is seriously changing, seriously changing everybody.
Suze: And understanding why you wanna do what you wanna do,
Suze: please do not let emotions rule what you do.
Suze: Got that everybody just think about that. All right, so
Suze: until Thursday when Ms. Travis joins us again on another
Suze: Ask KT and Suze anything. There's just a few things
Suze: that I want you to remember. The overall theme of
Suze: this podcast this year is to make your money, make
Suze: more money.
Suze: As well as never forget that if we work together
Suze: we will rise bye bye now.