Suze: January 9, 2025. Welcome everybody to the Women and Money podcast,
Suze: as well as everybody smart enough to listen. Today is
Suze: Ask Suze and KT anything. Now, before we begin,
Suze: We both have to say, right KT?
KT: Oh, Suze and I for the past 24 hours have
KT: been glued to the news, speaking to all of our
KT: friends in California and where our hearts go out to
KT: everyone in LA.
KT: And we just can't imagine what they're going through, but
KT: when we see the photos, I can't stop crying. It's so sad.
Suze: Actually I can, I'm sorry to say I can imagine
Suze: what they are going through.
KT: Oh, you, you lived it because it was... I forgot.
Suze: 1991 and the Oakland fires were 3000 homes burnt down.
Suze: And we got a knock on the door and I
Suze: was told to evacuate and so on and so forth
Suze: and so, oh, you bet I can imagine, thank God
Suze: for me anyway that the fire stopped a very short
Suze: way from my house but I do know on some
Suze: level what they were going through. So to that end
Suze: this Sunday,
Suze: I'm going to do an entire Suze school on fire insurance.
Suze: Because in 1991 I was still seeing clients at my
Suze: office at the Suze Orman Financial Group and I had
Suze: the corner glass office and as you would look out
Suze: the window you could see the fire as it was
Suze: happening number one.
Suze: But number two, the hills, for as far as you
Suze: could see were blackened ash. There was no green whatsoever
Suze: as you drove through the fire area which I had
Suze: to do every day. There was not
Suze: one structure standing, nothing. I mean, I'm telling you just
Suze: ash and you would see people standing there going through
Suze: their ash as I did with many friends to try
Suze: to find mementos and things like that, however.
Suze: I saw so many people came to me to decipher
Suze: their insurance policy, what they should do what was covered,
Suze: what was not so on some level I became an
Suze: expert on it so I think it's important at this time.
Suze: That the way that we really get educated not just
Suze: about stocks and bonds and all these things, but it's
Suze: important to be educated on what does your home insurance
Suze: cover and what does it not so that will be
Suze: Suze School on Sunday.
Suze: I do just want to say one other thing before
Suze: we begin, which is last Sunday, I gave a list
Suze: of many, many stocks and ETFs that I would be
Suze: dollar cost averaging into.
Suze: I also told you two things that this was going
Suze: to be the year of severe ups and severe downs,
Suze: not just with the entire indexes but with individual stocks
Suze: as well. I also told you that I thought Bitcoin
Suze: could easily go to 125, but before it went there,
Suze: it would go up and it would go down, and
Suze: it would not surprise me if
Suze: It went down to the low 90s or 87,000 right
Suze: in there and after that podcast it zoomed up to
Suze: almost 102,000 of Bitcoin and I was just praying it
Suze: was like, please don't get suckered in. Did you listen
Suze: to me? It's gonna go up, it's gonna go down,
Suze: but I think it's gonna go down before it goes
Suze: way up. So the key to everything, two things here.
Suze: Is dollar cost averaging in little little amounts number one
Suze: and number two, somebody wrote me and they said, Suze,
Suze: I know I'm supposed to be invested in the plan
Suze: that maybe Keith's gonna come out with for at least
Suze: five years. What if I only have two years? I
Suze: want you to all understand something that I'm about to
Suze: say right now.
Suze: No money that you have invested in the stock market.
Suze: It doesn't matter what plan, whose plan, your plan, however,
Suze: no money should be invested in the stock market that
Suze: you don't have at least five years that you do
Suze: not need to touch it.
Suze: And again you've heard me say that over and over again,
Suze: and the reason is, is that when the markets go down.
Suze: It could take easily five years for it to recover,
Suze: so you need five years or longer. How many times
Suze: have you heard me say that? I do have to
Suze: just comment on one stock that was mentioned on Sunday
Suze: last Sunday, IONQ, which the other day it was down 50%.
Suze: Now a lot of you probably are freaked if you
Suze: bought it, but probably you only if you follow me,
Suze: bought a little bit of it.
Suze: And I went in the other day and I bought
Suze: a lot of it when it was down 50%, so
Suze: that's the type of stock. I just have to say
Suze: that is long term and you dollar cost average into
Suze: it as I did tell you on Sunday, take advantage
Suze: of down days, especially in some of these stocks. Don't
Suze: let it scare you when they go down like that.
Suze: Just simply buy a little more and let's see what happens.
KT: Yeah, she, she did that. Everyone, I had lunch. I said, Suze,
KT: lunch is ready. KT, I can't, I can't join you. Why?
KT: She said a stock just went down 50%. I'm taking advantage.
KT: I said, buy it, girl, buy more.
Suze: And I also bought it for Colo anyway.
Suze: So there you go. So you have to have like
Suze: this fearless attitude for this year when investing in markets
Suze: and faith and faith in yourself that you can do
Suze: this because you know God's not gonna save us that
Suze: way KT it's our own actions that we take, but
Suze: things go up, things go down when you know you're
Suze: invested in good quality stocks, you take advantage of it.
Suze: The same thing with Palantir. It's down in the 60s
Suze: or it was down from 80%. Things go up, things
Suze: go down, and when they go down, they give you
Suze: another chance to buy even more, which is why dollar
Suze: cost averaging and what you're soon gonna learn about value
Suze: cost averaging is the way to go.
Suze: Alright, KT, that's all the time for the ask Suze
Suze: and KT anything. All right, girlfriend, what do you got?
KT: So Suze, this is my first email which I think
KT: is very relevant. Hi Suze and KT. My name is Will.
KT: I'm 35, living in Detroit, Michigan.
KT: I wanted to tell you that I'm so grateful to
KT: both of you. I was able to max out my
KT: Roth 401k and increase my net worth by $70,000 last year,
KT: and that's partially because of your guidance.
KT: I also think you'll be proud to know that I
KT: bought the must-have documents for my three best friends for Christmas. Yay,
KT: good job, William, or Will, working as the director of
KT: nursing at a large nursing home for the past five years,
KT: my single biggest challenge is that most people do not
KT: plan for.
KT: Every eventuality, including a rapid decline or becoming incapacitated, especially
KT: for folks that are incapacitated. I see so much time
KT: and money wasted at end of life seeking legal guardianship
KT: when decision making ability could have been easily established prior
KT: to incapacitation
KT: with the must have docs. They were so easy to
KT: get through and if everyone knew about them, my job
KT: would be much easier. Well, Will, first of all, he's
KT: great to give those as gifts. We think they're great
KT: Christmas gifts or anytime gifts.
Suze: Yeah, but Will, here's what I want everybody to know
Suze: on behalf of Will.
Suze: And especially of times where you have to expect the
Suze: unexpected which every single person in LA is experiencing right now.
Suze: The difference is, you know you're gonna get older hopefully.
Suze: You know that you may get sick. You know that
Suze: things happen in life and just like you take time
Suze: to insure your home or whatever it may be, you
Suze: have to make sure
Suze: that you have all your paperwork in place so that
Suze: you don't have to waste money. Remember this year's theme
Suze: making your money make more money. And one of the
Suze: ways that you make your money make more money is
Suze: you make sure that you have all the documents in
Suze: place today to protect your tomorrows. That is why the
Suze: must-have documents were created.
Suze: And you can get the must-have documents, everybody. They are
Suze: the will, the trust, the advanced directive, and durable power
Suze: of attorney for healthcare, and so on and so forth.
Suze: And all you have to do is go to musthavedocs.com.
Suze: They're $99 for $2500 worth of state of the art
Suze: documents good in all 50 states. You can share them
Suze: once you get them. So when you get them, you
Suze: will get an activation code. You can share it with
Suze: your family members and your friends. Every time you want
Suze: to make an update, you can do so absolutely free,
Suze: and once they're updated, you can get that update when
Suze: the actual program is updated, you get that for free.
Suze: So I know this sounds like a commercial, but it
Suze: most certainly is, but those documents are put out by
Suze: Hay House, and that is who does those documents. I'm
Suze: the educator of that now, but that's who is selling
Suze: them to you. So therefore go to musthadocs.com and really
Suze: everybody you should take advantage of it.
Suze: So I'm spending time with this right now on this
Suze: podcast because of what happened not only in the LA
Suze: fires because I'm sure there are people that will have
Suze: been injured or killed in them as well as to
Suze: honor Will and what Will asked us to do. Wait,
Suze: don't you think it's funny, KT? His name is Will.
KT: Don't go
KT: there.
Suze: But Will, Will wants all of you to have a
Suze: will and a trust, huh? You see how that works.
Suze: All right, let's go on.
KT: That's a "Suzeism". All right. OK, next emails from Vanessa.
KT: Hi Suze. On September 16, 2017, when our daughter was
KT: 10 years old, we signed up for a $100,000 whole
KT: life insurance policy that will be fully paid off after
KT: paying monthly premiums for 20 years.
KT: So it was a 20 year pay whole life. We
KT: will not have to make any additional premium payments after
KT: the 20 years. After 7.5 years of paying about $75
KT: a month, we've paid in $6750 towards the policy.
KT: The value is $3,353. OK? Our daughter is now 17
KT: years old and thank God she is healthy. Could you
KT: please let us know if after making all these premium payments,
KT: would our daughter be better off at this stage
KT: if we continue making the payments, or should we absorb
KT: the loss of money paid so far, stop making additional
KT: premium payments, and instead invest the remaining money for her
KT: in a Standard and Poor 500 ETF like VOO?
KT: What's your thought, Suze?
Suze: Tell everybody what my face looks like. Come on.
KT: She's impressed,
Suze: Impressed?
KT: That I did such a great read.
Suze: And like tell them what my posture is right now.
KT: Her posture is you've gotta be
KT: kidding me.
Suze: No, the posture what my, my head is on my hand.
Suze: And I'm leaning over like really?
KT: Really... well listen everybody you send anything in about whole
KT: life just remember whole life, not Whole Foods, whole
KT: life.
Suze: There you go. All right, my dear Vanessa, listen to me.
Suze: First of all, I have to ask you, why did
Suze: you buy life insurance on a 10 year old child? Why?
Suze: Who sold you that? You only buy life insurance in
Suze: my opinion,
Suze: when somebody is financially dependent upon you, and if you
Suze: were to die, they would suffer a loss. If your
Suze: daughter were to die, you would suffer the biggest loss
Suze: of your life, obviously you might not even want that
Suze: $100,000 at that point in time because I've seen that
Suze: happen where you know, the parents just give it all
Suze: away because they can't believe that their child died.
Suze: But the question becomes, did you do it so that
Suze: your daughter, when she got older, would have a paid
Suze: up policy of $100,000? Is that why you did it?
Suze: I would say to you it was a mistake. I
Suze: just think it is a mistake and let me just
Suze: tell you why. Obviously at $75 a month you say
Suze: you've already paid in $6750 and you still have 12 and a half years.
Suze: So by the time you're done with all of this,
Suze: you still owe $11,250
Suze: or you will have paid a total of $18,000 over
Suze: 20 years for your daughter to have a $100,000 life
Suze: insurance policy and is that something that you think she
Suze: really needs? Don't you think that you could probably help
Suze: her more in life
Suze: than in death, so to speak, by taking that $75
Suze: a month and having invested it over all those years really?
Suze: So if I were you.
Suze: You say that you have a policy value of about $3300.
Suze: Now I don't know if you mean that you have
Suze: a cash value, meaning if you were to stop the
Suze: policy that you would get back $3300 or not or
Suze: if that's just what the policy value is worth and
Suze: if you were to cash it out, you would get
Suze: a whole lot less but just let's make the assumption.
Suze: That the $3,353 is what you would get back if
Suze: you stopped the policy.
Suze: If you took that $3300 right now.
Suze: And you simply invested it and let's say your daughter
Suze: now is 17 and half years of age because you've been doing
Suze: it for 7 and a half years and she was 10 years
Suze: of age when you did this and let's say she
Suze: has a little bit of a side job or whatever
Suze: it may be and she could put that $3300 into
Suze: a Roth IRA because maybe she earns $3300 a year.
Suze: And you were to give her maybe $75 a month
Suze: to continue to put into that Roth IRA, and she
Suze: did it for another 12 and a half more years at just an 8%
Suze: annual average rate of return, approximately per year. She would
Suze: have about $27,000 in her Roth IRA.
Suze: And let's just say she never did anything with that
Suze: money again. She never put another penny in. And now
Suze: she's 50 years of age. Just let's say that's true.
Suze: At an 8% annual average rate of return, she would
Suze: have $140,000 in her Roth IRA.
Suze: At a 10% annual average rate of return she'd have
Suze: about $205,000 in her Roth IRA if she waited till
Suze: she was 70.
Suze: Can you just imagine she might have 5 or $600,000
Suze: at that time all tax free.
Suze: But that's money that she could use. That's money that
Suze: she can access. That $100,000 life insurance policy doesn't help
Suze: her at all, really, while she's alive. Maybe it helps
Suze: her if she gets married, she has a child, whatever
Suze: it may be, but she would be far better off
Suze: buying a term insurance policy.
Suze: And have this money for herself, but she would only
Suze: buy a term policy if somebody is financially dependent upon her.
Suze: So therefore, oh, you bet I would not continue to
Suze: do this at all. I would switch that money if
Suze: you can to a wroth for her. If not, hey,
Suze: just put it then in an investment account for her.
Suze: Eventually she'll be able to fund her wrath with that money,
Suze: but that's what I would do if I were you.
KT: OK, now, Suze, so keeping
KT: on track with Roth, one of one of my favorite topics.
KT: This next one's from Gina. She said, hi KT and Suze.
KT: I'm 56 years old and I want to start converting
KT: my traditional IRA to my Roth IRA
Suze: And how old is she
Suze: 56?
KT: Yes... At Charles Schwab, but I don't want to use
KT: my liquid savings to pay the
KT: taxes.
Suze: Why not? What's wrong with.
KT: Oh wait a minute, this is what she's asking, and
KT: it's a good question because I, I wouldn't think you
KT: can do this, but here's what she wants to know.
KT: When I do the conversion, could I ask Charles Schwab
KT: to withhold the amount that I think I would owe
KT: for
KT: taxes?
Suze: Yea, if you want to make the biggest mistake in
Suze: your life, but go on.
KT: Well, Schwab's telling her.
KT: Schwab said, of course you can do this, but those
KT: funds would be treated as distribution and you would be
KT: taxed and penalized on that.
Suze: They are correct,
KT: Yeah. Schwab was right. I clarified. I, I didn't want
KT: those funds to be sent to me rather just hold
KT: them for my taxes, she said it's still treated as
KT: a distribution.
Suze: Absolutely.
KT: Is this true?
KT: That is true.
KT: Well, there you go. Well, you answered her question. Next
KT: question is from Elle.
KT: She said, I think it's a she. I inherited my
KT: father's IRA after his death in 2020. He was taking RMDs.
KT: I split the account and I have a portion with
KT: Fidelity and a portion with Vanguard. Do I need to
KT: calculate the RMD for each, or can I take it
KT: all from one?
Suze: So let me,
Suze: let's quickly, wait, just let me answer that, all right,
Suze: which is Elle, even though you split it between the two,
Suze: all you have to do is take the ending balance
Suze: of last year, December 31st, 2024. Whatever the ending balances
Suze: of both of those accounts, you add them together, you
Suze: then have to do your life expectancy divided into that.
Suze: And you can take whatever that number is from either one.
Suze: You don't have to split it equally that way. Just
Suze: make sure you do it before December 31st of this year.
KT: So Suze, next question's from Christine. She said, Hi KT
KT: and Suze. My mom is 83. She's in a state
KT: dependent care facility. She's received $23,000 in benefits for Social Security.
KT: She has under 2000 in assets and no income. Does
KT: she still need to file taxes? My sister takes care
KT: of her finances and asked me. I have no idea.
KT: Now Suze, Christine said if it were a quizzy, she'd
KT: say yes.
Suze: Do you want this to be your quizzy?
Suze: Come on, come on.
KT: No, it's Christine's quizzy. She say yes.
Suze: What is this? Is this is your quizzy.
KT: All right, I think that everyone has to file taxes,
KT: so I'd say yes too.
Suze: Positive?
KT: Yeah. (Suze makes the wrong answer sound)
KT: Come on, it doesn't it, I know you have to file,
KT: but you don't have to pay if you don't have
KT: any money.
Suze: No, let's just say this was for 2024. All right.
Suze: And so for 2024, you are not required to file
Suze: a tax return.
Suze: Because her income did not equal or exceed $16,550 right?
Suze: And all she had, no, no, all she had was
Suze: $23,000 of
KT: Social Security. OK, that's why we messed up.
Suze: She did not have income. So there you go.
KT: So Social Security is not taxable.
Suze: All right, you got any others for me?
KT: Yeah. So Suze, you tricked me on that Social Security,
KT: so here's another one.
KT: This is Social Security marriage penalty ready from William, he said,
KT: I wanted to make sure that you know if a
KT: couple collects Social Security...
Suze: So wait, this person is asking if I know -
Suze: versus they
Suze: want me to tell...
KT: I can tell you're already going to William is probably
KT: making a big mistake. Let me read what he wrote.
KT: He said, I want to make sure you know if
KT: a couple collects Social Security.
KT: That they limit to monthly maximum to $6,138. But if
KT: you're divorced, both can collect over that amount. That is
KT: why I truly believe that it is a penalty to
KT: be married if both spouses retire later in life and
KT: both collect benefits.
KT: What's, what's William want everyone to do, get a divorce
KT: before they start collecting?
Suze: William, where did you
Suze: get
Suze: this information firsthand. I can tell you, KT, are we married?
Suze: And KT.
Suze: Between the two of us, are we limited to $6,138
Suze: in Social
Suze: Security?
KT: No, we get like $8000 or something...
Suze: Between the two of us. We get a lot. We
Suze: get a lot.
KT: We get about the max.
Suze: We get the max.
Suze: You know, right now the max versus 70 year old
Suze: is I think 4,636. So William, if two people are
Suze: married and they are claiming each their own Social Security.
Suze: Not a spousal benefit, not a divorce benefit, but they're
Suze: married and they're each claiming their own Social Security. There
Suze: is no limit because they're married wherever you got that. I, I,
Suze: I
Suze: don't know.
KT: I'll do it for you. (KT makes the wrong answer sound).
Suze: Right. And so again, if two of you are married
Suze: this year and you're both 70, you could have $4,636
Suze: each if you qualify for the maximum. But William, I
Suze: just want to say this, I want to make sure
Suze: that you know that you are 1000% wrong. All right.
KT: I think that's a good one to end on Suze.
Suze: Williams, is that was that his name? William, right? We
Suze: started with Will.
KT: Now we have a William...
Suze: and now which is like Will I am... kind of funny, right?
Suze: And we won't go there. All right, everybody, so when.
Suze: Until Sunday,
KT: Sunday will be good. And if you have any friends
KT: in California, especially in the, the, the burning areas, have
KT: them listen to this, tell
KT: them about it.
Suze: It'll be on here for them. But anyway.
Suze: We have a new ending right KT. So here's what
Suze: we want you to remember. I'll take them out, my dear.
KT: OK.
Suze: There's two things I want you to remember, and it's
Suze: this you are to make your time worth your time.
Suze: And you are to make your money, make more money,
Suze: and if you do that, oh, you will be...
KT: Unstoppable.
Suze: There
Suze: you go, bye bye.