1 00:00:33,360 --> 00:00:41,110 Suze: January 4th 2024. Can you believe it? 2024. Welcome everybody 2 00:00:41,119 --> 00:00:44,229 Suze: to the Women and Money podcast as well as everybody 3 00:00:44,240 --> 00:00:46,970 Suze: smart enough to listen. This is... 4 00:00:47,060 --> 00:00:49,729 KT: Ask KT and Suze anything. 5 00:00:49,759 --> 00:00:52,630 Suze: And if you write in your question to ask Suze 6 00:00:52,848 --> 00:00:58,849 Suze: Podcast at gmail.com and KT happens to pick it, then 7 00:00:58,860 --> 00:01:02,720 Suze: we will answer it right here on the podcast. What 8 00:01:02,729 --> 00:01:04,769 Suze: do you think that we're in 2024? How does that 9 00:01:04,779 --> 00:01:05,238 Suze: make you feel? 10 00:01:05,269 --> 00:01:07,789 KT: I love that. I like this year. I'm actually looking 11 00:01:07,800 --> 00:01:14,309 KT: forward to it because 2024 adds up to an 8. 224. 12 00:01:15,459 --> 00:01:17,000 KT: Adds up to an eight. 13 00:01:17,010 --> 00:01:19,370 Suze: You had a little trouble with numbers there for a second, 14 00:01:19,379 --> 00:01:22,839 Suze: did you? Ok. No problem. Everybody, if you don't know 15 00:01:22,849 --> 00:01:28,639 Suze: eight is KTs lucky number. My lucky number is nine. 16 00:01:28,699 --> 00:01:32,629 Suze: So next year 2025 is a nine. But the truth 17 00:01:32,639 --> 00:01:35,220 Suze: is neither of us can imagine being luckier than we 18 00:01:35,230 --> 00:01:37,529 Suze: all ready are. 19 00:01:37,870 --> 00:01:41,050 Suze: So, we hope you all had a fabulous New Year's. 20 00:01:41,059 --> 00:01:44,039 Suze: For me, I'm so happy. It's all over. I can't 21 00:01:44,050 --> 00:01:44,930 Suze: even tell you. 22 00:01:46,900 --> 00:01:49,430 KT: Well, do they all know that? It's not your thing 23 00:01:49,440 --> 00:01:55,410 KT: to like, do these celebrations? And everybody knows that Suze 24 00:01:55,419 --> 00:01:56,599 KT: likes simple 25 00:01:56,949 --> 00:02:00,900 KT: and holidays for some reason. Give her little angst. 26 00:02:00,910 --> 00:02:05,339 Suze: I'll tell you why. Because especially when I was a 27 00:02:05,349 --> 00:02:08,940 Suze: financial advisor. Not that I'm not a financial advisor now, 28 00:02:09,008 --> 00:02:14,008 Suze: but seeing clients and we would work all year KT 29 00:02:14,020 --> 00:02:16,889 Suze: seriously on getting them out of debt and doing these 30 00:02:16,899 --> 00:02:21,109 Suze: great things with them and then would come the holidays 31 00:02:21,220 --> 00:02:23,210 Suze: and between Thanksgiving, 32 00:02:24,559 --> 00:02:29,508 Suze: Christmas, Hanukkah, whatever it may be and New Year's, they 33 00:02:29,520 --> 00:02:33,850 Suze: would end up in January in the exact same place. 34 00:02:33,860 --> 00:02:38,300 Suze: They were one year before because of all the money 35 00:02:38,309 --> 00:02:41,899 Suze: they would spend on gifts and all of these things. 36 00:02:42,130 --> 00:02:46,109 Suze: I started to spend my holidays truthfully going because, you know, 37 00:02:46,119 --> 00:02:47,600 Suze: there were a lot of times I was all by 38 00:02:47,610 --> 00:02:50,979 Suze: myself on holidays as you know. Right. And 39 00:02:51,570 --> 00:02:55,079 Suze: so I would, on Christmas, I would go and I 40 00:02:55,089 --> 00:02:58,470 Suze: would serve at certain churches or whatever and all these 41 00:02:58,479 --> 00:03:02,630 Suze: people that didn't have the money to buy things or 42 00:03:02,639 --> 00:03:05,470 Suze: to eat or to. And so for me, I think 43 00:03:05,479 --> 00:03:08,859 Suze: about all the sadness that it also brings about 44 00:03:09,758 --> 00:03:12,589 Suze: and all the families that really can't afford to give 45 00:03:12,600 --> 00:03:16,330 Suze: their kids and everybody money. So I think about that. 46 00:03:16,339 --> 00:03:18,630 Suze: But we had a good one regardless. 47 00:03:18,639 --> 00:03:23,910 KT: I think about, I think about our traditions and festivities 48 00:03:23,919 --> 00:03:27,070 KT: and gathering with family and friends... 49 00:03:27,080 --> 00:03:31,759 KT: and gooch making our gooch our traditional Christmas. Um, and 50 00:03:31,770 --> 00:03:34,089 KT: year end, I just have to tell you this. And 51 00:03:34,100 --> 00:03:37,389 KT: maybe you saw the pictures on the women and Money App. 52 00:03:37,750 --> 00:03:40,800 Suze: We spent maybe 5 to 7 hours. 53 00:03:41,389 --> 00:03:43,360 KT: We spent the whole day. What day was that? It 54 00:03:43,369 --> 00:03:44,429 KT: was a football game. 55 00:03:44,440 --> 00:03:49,729 Suze: I don't know. But Colo KT and myself made 100 56 00:03:49,740 --> 00:03:53,169 Suze: and 20 little things of gooch. And if you want 57 00:03:53,179 --> 00:03:54,919 Suze: to know what they are, you have to go on 58 00:03:54,929 --> 00:03:56,199 Suze: the women and Money app. 59 00:03:56,259 --> 00:03:57,009 KT: Well, let's tell them 60 00:03:57,115 --> 00:03:59,315 KT: it's a pastry in the shape of a fish 61 00:03:59,505 --> 00:04:01,544 KT: and it was not my favorite thing to do. I 62 00:04:01,554 --> 00:04:02,914 KT: can just tell you that. 63 00:04:03,125 --> 00:04:04,615 Suze: And it's like, KT, wait... 64 00:04:04,705 --> 00:04:09,414 KT: Suze whined about this episode and adventure for about four 65 00:04:09,425 --> 00:04:14,304 KT: days until the day that we distributed right before the 66 00:04:14,315 --> 00:04:16,375 KT: New Year when all of our friends and, 67 00:04:16,649 --> 00:04:19,988 KT: and neighbors here in, in the island came back for, 68 00:04:20,000 --> 00:04:23,659 KT: to celebrate New Year's Eve, which they traditionally did. We 69 00:04:23,670 --> 00:04:27,390 KT: distributed all these little tins with gooch with notes and cards. 70 00:04:27,839 --> 00:04:34,459 KT: Well, the next day, Suze received a million emails. People 71 00:04:34,470 --> 00:04:38,010 KT: coming by. I love the gooch. One of our Spanish 72 00:04:38,019 --> 00:04:42,339 KT: friends said KT, Suze make us more gooch empanadas. 73 00:04:42,959 --> 00:04:45,469 Suze: But I never, and even one person... 74 00:04:46,000 --> 00:04:50,549 KT: Tell them it was Fernando. Fernando wanted seconds. It's like 75 00:04:50,559 --> 00:04:50,940 KT: these are 76 00:04:50,993 --> 00:04:54,342 KT: really coveted pastries and very hard to make labor intensive. 77 00:04:54,363 --> 00:04:58,101 Suze: Because remember everybody, we don't buy gifts for people, make them, 78 00:04:58,243 --> 00:05:01,311 Suze: but they're super healthy. But to make this many, it 79 00:05:01,322 --> 00:05:02,222 Suze: was like, really? 80 00:05:02,312 --> 00:05:04,643 KT: It was the whole day but it was fun. Suze 81 00:05:04,653 --> 00:05:07,871 KT: made the best ones, the best fish, best looking. 82 00:05:07,942 --> 00:05:11,493 Suze: But anyway, so she was right. I was wrong and 83 00:05:11,502 --> 00:05:14,252 Suze: you know what, the gratitude that everybody showed us 84 00:05:14,335 --> 00:05:17,815 Suze: about these gooches did what they do for me is. 85 00:05:17,865 --> 00:05:19,675 Suze: I know whatever it is, 86 00:05:20,065 --> 00:05:24,275 KT: But it made you realize, it made you realize that 87 00:05:24,286 --> 00:05:28,915 KT: tradition does count and that everyone said, make me more 88 00:05:28,925 --> 00:05:30,515 KT: next year, Suze... 89 00:05:30,526 --> 00:05:34,365 Suze: And KT. All right, sweetheart. Let's get started. 90 00:05:34,376 --> 00:05:37,675 KT: Everyone will get bored with our, our gooch story. OK. 91 00:05:37,876 --> 00:05:40,716 KT: First question is from Joe. 92 00:05:41,149 --> 00:05:44,239 KT: Hi, Suze. Hope you had a wonderful New Year which 93 00:05:44,250 --> 00:05:47,238 KT: she did, Joe. I have a question regarding back door... 94 00:05:48,040 --> 00:05:51,570 Suze: Wait, let's tell the truth about New Year's Eve at midnight. 95 00:05:52,380 --> 00:05:56,859 Suze: Right? So all these fireworks went off because the island 96 00:05:56,869 --> 00:05:59,309 Suze: does an incredible firework display 97 00:06:01,040 --> 00:06:02,809 KT: A Bahama tradition. 98 00:06:03,079 --> 00:06:05,850 Suze: And KT tried to wake me up. 99 00:06:06,019 --> 00:06:09,738 KT: Suze, Suze and I both said we got, we're well, first, 100 00:06:09,750 --> 00:06:13,649 KT: we were waking up at the crack of dawn to 101 00:06:13,660 --> 00:06:16,010 KT: go fishing on January 1st. 102 00:06:16,390 --> 00:06:18,970 KT: So we decided we'll take a little nap and then 103 00:06:18,980 --> 00:06:21,649 KT: we'll see the fireworks. We always go on our front porch, 104 00:06:21,709 --> 00:06:24,450 KT: get wrapped up in a big blanket and watch the 105 00:06:24,459 --> 00:06:25,488 KT: fireworks show. 106 00:06:25,970 --> 00:06:28,730 KT: Well, this year, Suze was next to me 107 00:06:29,859 --> 00:06:35,160 Suze: I was tired from making all that gooh and didn't hear the fireworks go off. So there you go. 108 00:06:35,369 --> 00:06:37,609 Suze: We won't tell any more stories. 109 00:06:39,380 --> 00:06:43,529 KT: Ok. So Joe, here we go. Joe said to Suze, 110 00:06:43,540 --> 00:06:47,029 KT: we both want to contribute to a Roth Ira via 111 00:06:47,040 --> 00:06:50,709 KT: a backdoor conversion. Would it be possible to do so? 112 00:06:50,720 --> 00:06:53,058 KT: After January 1st 113 00:06:53,334 --> 00:06:58,855 KT: for 2023 contributions or did we have to convert it 114 00:06:58,863 --> 00:07:02,404 KT: before January 1st, 2024? 115 00:07:02,825 --> 00:07:06,724 Suze: You had to do it beforehand by friends can't do it. 116 00:07:07,234 --> 00:07:10,565 Suze: So here's the thing that you have to understand everybody 117 00:07:10,665 --> 00:07:14,945 Suze: when you are making a conversion and a conversion in 118 00:07:14,954 --> 00:07:18,725 Suze: a retirement account is where you maybe have money in 119 00:07:18,734 --> 00:07:20,295 Suze: a traditional IRA 120 00:07:20,769 --> 00:07:24,880 Suze: and you want to convert it to a Roth IRA. 121 00:07:25,339 --> 00:07:30,049 Suze: And when you do a conversion, there are no income limitations, 122 00:07:30,190 --> 00:07:35,320 Suze: but all conversions have to be made by the last 123 00:07:35,380 --> 00:07:37,570 Suze: day of the year. 124 00:07:37,989 --> 00:07:41,089 Suze: So Joe, you can do that now, but it won't 125 00:07:41,100 --> 00:07:47,019 Suze: be for tax year 2023. It will be for 2024. 126 00:07:47,029 --> 00:07:47,799 Suze: All right, KT. 127 00:07:47,820 --> 00:07:53,010 KT: OK. Next question is from Maria. So Maria said, Suze, 128 00:07:53,019 --> 00:07:56,089 KT: thank you for taking the time to read my email. 129 00:07:56,100 --> 00:08:00,209 KT: I've been an avid follower of yours for many years now. 130 00:08:00,220 --> 00:08:05,309 KT: I love your show, especially Ask KT and Suze Anything. 131 00:08:05,369 --> 00:08:07,220 Suze: Now, do you have any idea everybody 132 00:08:07,470 --> 00:08:09,410 Suze: why she chose that one? 133 00:08:09,440 --> 00:08:12,459 KT: I am right here she goes. I'm 56 years old. 134 00:08:12,470 --> 00:08:16,420 KT: My husband is 62. I'm still working while my husband 135 00:08:16,429 --> 00:08:20,660 KT: retired due to a medical condition. We have two boys, 136 00:08:20,670 --> 00:08:25,299 KT: ages 24 and 21. We have a revocable living trust 137 00:08:25,309 --> 00:08:27,779 KT: that was dated in 2005. 138 00:08:28,170 --> 00:08:31,239 KT: We've added the names of the children to all of 139 00:08:31,250 --> 00:08:35,390 KT: our bank accounts. However, I'm still confused as far as 140 00:08:35,400 --> 00:08:40,400 KT: the 401k and life insurance is concerned. Should we put 141 00:08:40,409 --> 00:08:43,950 KT: the name of the trust or the spouse as the 142 00:08:43,960 --> 00:08:45,190 KT: primary beneficiary 143 00:08:45,510 --> 00:08:48,689 KT: of our retirement account? And then she says, how about 144 00:08:48,700 --> 00:08:49,890 KT: the life insurance? 145 00:08:50,200 --> 00:08:56,829 Suze: Yeah, in terms of a retirement account, everybody, you would always, always, always, 146 00:08:56,840 --> 00:09:02,239 Suze: especially if it's a traditional retirement account. Meaning pre-tax, 147 00:09:02,809 --> 00:09:06,789 Suze: in my opinion, you would make your spouse always the 148 00:09:06,799 --> 00:09:13,218 Suze: primary beneficiary and the trust, the secondary beneficiary. Now, the 149 00:09:13,229 --> 00:09:17,059 Suze: reason that I say that is because a spouse has 150 00:09:17,070 --> 00:09:22,340 Suze: benefits to do things with that traditional ira more than 151 00:09:22,349 --> 00:09:25,858 Suze: anybody else, the same holds true really for a Roth, 152 00:09:26,169 --> 00:09:30,690 Suze: but a spouse has benefits that everybody else doesn't. 153 00:09:31,119 --> 00:09:34,179 Suze: And given that I don't know if you have the 154 00:09:34,190 --> 00:09:38,619 Suze: right type of revocable trust. Is it a see-through trust? 155 00:09:38,630 --> 00:09:43,669 Suze: Is it not just to play safe? Make your spouse 156 00:09:43,679 --> 00:09:49,849 Suze: the primary beneficiary of the retirement account and the trust, 157 00:09:49,859 --> 00:09:55,549 Suze: the secondary beneficiary, especially if you have children, everybody 158 00:09:56,049 --> 00:09:59,609 Suze: As far as the life insurance policy goes, make the 159 00:09:59,619 --> 00:10:03,590 Suze: trust the primary beneficiary, I would do it that way 160 00:10:03,599 --> 00:10:08,530 Suze: because again, remember minors really can't inherit money. So therefore, 161 00:10:08,539 --> 00:10:11,630 Suze: I don't know, you know, if you're listening to this 162 00:10:11,640 --> 00:10:14,469 Suze: and maybe you have kids that are minors, it does 163 00:10:14,479 --> 00:10:16,229 Suze: make a difference. So 164 00:10:16,659 --> 00:10:17,770 Suze: that's what I would do. 165 00:10:18,010 --> 00:10:22,169 KT: Ok. Next question, Suze is from Alex Happy New Year, 166 00:10:22,179 --> 00:10:26,359 KT: Suze and KT. When might it make sense to invest 167 00:10:26,369 --> 00:10:30,959 KT: in a taxable account instead of a 403 B that 168 00:10:30,969 --> 00:10:31,599 KT: charges 169 00:10:31,695 --> 00:10:32,815 KT: fees? 170 00:10:33,164 --> 00:10:35,135 Suze: That was a great question you picked there. 171 00:10:35,445 --> 00:10:38,104 KT: I know because I'm wondering who wants to invest in 172 00:10:38,114 --> 00:10:41,414 KT: a taxable account? Wait, then he said I already max 173 00:10:41,424 --> 00:10:44,034 KT: out a Roth IRA. Thank you for your time. 174 00:10:44,044 --> 00:10:47,674 Suze: Well, you may not know it, KT... but 175 00:10:48,255 --> 00:10:50,075 KT: When might it make sense? 176 00:10:50,405 --> 00:10:53,994 Suze: We stopped investing a long time ago 177 00:10:54,799 --> 00:11:01,010 Suze: in pre-tax accounts like a 401k or a pension or whatever. 178 00:11:01,020 --> 00:11:03,669 Suze: Because the growth of that money when you take it 179 00:11:03,679 --> 00:11:08,650 Suze: out would have been taxed us as ordinary income because 180 00:11:08,659 --> 00:11:10,900 Suze: of that, I gave up the tax write off then 181 00:11:10,909 --> 00:11:13,619 Suze: because I always knew our tax bracket would be really high. 182 00:11:13,989 --> 00:11:17,710 Suze: And I started to invest in a brokerage account 183 00:11:18,020 --> 00:11:21,070 Suze: where as long as we held the account for one year, 184 00:11:21,080 --> 00:11:23,718 Suze: the investments when we sold, it would be at the 185 00:11:23,729 --> 00:11:28,940 Suze: capital gains tax rate. So sometimes it does make sense, Alex, 186 00:11:28,950 --> 00:11:34,150 Suze: in this particular situation, it does make sense if you 187 00:11:34,159 --> 00:11:36,080 Suze: have a 403 B, 188 00:11:36,559 --> 00:11:42,108 Suze: especially a 403 B that does not match your contribution, 189 00:11:42,200 --> 00:11:44,460 Suze: which means you put in a dollar and maybe they 190 00:11:44,469 --> 00:11:48,400 Suze: put in 50 cents. If they do not match your contribution, 191 00:11:48,510 --> 00:11:51,569 Suze: you would be far better off just taking that money 192 00:11:51,580 --> 00:11:52,179 Suze: and doing one 193 00:11:52,275 --> 00:11:56,775 Suze: with it, putting it in an investment account and investing 194 00:11:56,784 --> 00:12:00,114 Suze: it there for the long run. So that when you 195 00:12:00,125 --> 00:12:02,265 Suze: do go to take it out, it will be taxed 196 00:12:02,275 --> 00:12:06,034 Suze: at the capital gain rate rather than ordinary income. Right. 197 00:12:06,044 --> 00:12:07,494 Suze: My little lucky one. 198 00:12:08,770 --> 00:12:10,619 KT: No, I'm your lucky charm. 199 00:12:11,770 --> 00:12:14,030 Suze: But you're a lucky one this year because it never mind. 200 00:12:14,039 --> 00:12:14,539 Suze: Go on. 201 00:12:14,859 --> 00:12:18,140 KT: Ok. Next question is from Arlene. 202 00:12:18,150 --> 00:12:21,729 Suze: Even though it's a New Year, some things stay the same. 203 00:12:23,549 --> 00:12:27,039 KT: Dear Suze and KT. I have been religiously listening to 204 00:12:27,049 --> 00:12:30,659 KT: your podcast every Thursday and Sunday. I am one of 205 00:12:30,669 --> 00:12:35,140 KT: those women who had to learn quickly about finance after 206 00:12:35,150 --> 00:12:38,900 KT: my husband died, leaving me with two teenage sons. 207 00:12:39,469 --> 00:12:43,520 KT: And yes, I have a little Suze notebook. I love that. 208 00:12:43,830 --> 00:12:47,020 KT: I love that You said that Arlene. my question is 209 00:12:47,030 --> 00:12:50,960 KT: about Allian's CDs and whether or not they are callable. 210 00:12:51,099 --> 00:12:55,968 KT: What is your opinion about callable CDs DS versus noncallable? 211 00:12:56,320 --> 00:12:57,219 Suze: So, Arlene... 212 00:12:57,340 --> 00:12:59,239 KT: First tell everyone what callable is. 213 00:12:59,250 --> 00:13:00,760 Suze: I will. But I wanna say, 214 00:13:01,520 --> 00:13:03,929 Suze: did you see where you said that you needed to 215 00:13:03,940 --> 00:13:06,750 Suze: learn this the hard way and needed to learn it 216 00:13:06,760 --> 00:13:11,989 Suze: quickly I think. Were your exact words? Everybody listen to 217 00:13:12,000 --> 00:13:17,348 Suze: what Arlene said. Don't be one of those women as 218 00:13:17,359 --> 00:13:18,549 Suze: she also said 219 00:13:18,849 --> 00:13:22,489 Suze: that finds yourself in a situation that something happens, that 220 00:13:22,500 --> 00:13:27,380 Suze: is unexpected. And now you are left not knowing about money, 221 00:13:27,409 --> 00:13:30,349 Suze: not knowing where things come from, you have to raise 222 00:13:30,359 --> 00:13:32,710 Suze: kids and now your whole world has fallen apart. 223 00:13:33,039 --> 00:13:36,760 Suze: This is the time, this is the year that I 224 00:13:36,770 --> 00:13:40,659 Suze: want you to be smart. Everybody be smart and make 225 00:13:40,669 --> 00:13:44,739 Suze: the right decisions and that you can stay smart because 226 00:13:44,750 --> 00:13:51,260 Suze: otherwise things can dramatically go wrong. And the time to 227 00:13:51,270 --> 00:13:54,539 Suze: learn about your money is not when you have suffered 228 00:13:54,549 --> 00:13:59,579 Suze: a serious emotional loss. I can tell you that much. 229 00:14:00,090 --> 00:14:06,140 Suze: Now, in terms of Arlene's question here about Alliant's Certificates 230 00:14:06,150 --> 00:14:09,630 Suze: of deposits, whether they are callable or not, they are 231 00:14:09,640 --> 00:14:16,189 Suze: absolutely not. So what is a callable CD? Usually a 232 00:14:16,200 --> 00:14:20,409 Suze: callable CD is a certificate of deposit that you buy 233 00:14:20,419 --> 00:14:21,580 Suze: at a brokerage firm 234 00:14:22,260 --> 00:14:26,369 Suze: and they're selling it to you on the secondary market sometimes. 235 00:14:26,580 --> 00:14:31,039 Suze: And the issuer of that certificate of deposit has the 236 00:14:31,049 --> 00:14:34,409 Suze: right to call it back and pay you whatever it 237 00:14:34,419 --> 00:14:37,320 Suze: is that you paid for it and give you your 238 00:14:37,330 --> 00:14:40,929 Suze: money back. Why would they do that? They would do 239 00:14:40,940 --> 00:14:45,179 Suze: that because maybe they issued a certificate of deposit to 240 00:14:45,190 --> 00:14:48,359 Suze: you when interest rates were at five or 6%. 241 00:14:48,799 --> 00:14:52,219 Suze: Now, interest rates are at one or 2% and they 242 00:14:52,229 --> 00:14:55,219 Suze: don't want to pay you five or 6% anymore. So 243 00:14:55,229 --> 00:14:58,489 Suze: they have the right to call it back. Give you 244 00:14:58,500 --> 00:15:03,599 Suze: back your money, but then they can then reissue certificates 245 00:15:03,609 --> 00:15:05,739 Suze: of deposits at one or 2%. 246 00:15:06,340 --> 00:15:12,799 Suze: So no, never ever, ever buy a Callable CD. That's 247 00:15:12,809 --> 00:15:17,630 Suze: my opinion about it. But not Alliant. They do not 248 00:15:17,880 --> 00:15:19,390 Suze: do callable CDs. 249 00:15:21,210 --> 00:15:25,809 Suze: But they have great rates. Everybody really good rate. I'm just 250 00:15:25,820 --> 00:15:29,520 Suze: gonna tell you tomorrow because I can't tell you yet. 251 00:15:29,890 --> 00:15:34,280 Suze: But on the fifth of January, there will be a 252 00:15:34,289 --> 00:15:40,099 Suze: rate change at Alliant for the on your CD. And 253 00:15:40,109 --> 00:15:42,200 Suze: you're going to be very shocked at it. 254 00:15:42,500 --> 00:15:47,760 Suze: So um be happy, happy, you'll be happy. I not down, 255 00:15:47,770 --> 00:15:52,590 Suze: I'm happy, happy, but I can't tell you, can't tell 256 00:15:52,599 --> 00:15:54,169 Suze: you yet. Can't say anything. 257 00:15:54,400 --> 00:15:56,869 KT: OK. Ready? Dear KT and Suze. 258 00:15:56,880 --> 00:15:58,969 Suze: And I'll tell you that Sunday unless you find out 259 00:15:58,979 --> 00:16:00,590 Suze: yourself before that go on. 260 00:16:01,020 --> 00:16:04,359 KT: This is from Angelique. She says dear KT and Suze, Angelique. 261 00:16:04,369 --> 00:16:07,830 KT: You got the order right? Happy New Year. I hope 262 00:16:07,840 --> 00:16:10,440 KT: you're doing well. I love the updates 263 00:16:10,549 --> 00:16:12,989 KT: on the women and money app. Feel free to keep 264 00:16:13,000 --> 00:16:15,030 KT: them coming. We talked about... 265 00:16:15,219 --> 00:16:18,330 Suze: KT, you don't know because you don't go on the app. 266 00:16:18,380 --> 00:16:20,729 KT: What did you do? What you update now? Did you 267 00:16:20,739 --> 00:16:21,630 KT: put a picture in me? 268 00:16:21,640 --> 00:16:25,619 Suze: I put lots of pictures of our dinner. 269 00:16:25,630 --> 00:16:27,489 KT: You put one of Colo and me dancing, right? 270 00:16:28,869 --> 00:16:31,250 Suze: I don't know. But anyway, go on. 271 00:16:31,260 --> 00:16:36,109 KT: OK, so we talked about things when people say, oh 272 00:16:36,119 --> 00:16:38,489 KT: KT I saw that cute photo of you 273 00:16:38,929 --> 00:16:43,849 KT: wrapping up a Christmas tree with like rolls of garbage can.. 274 00:16:44,109 --> 00:16:46,419 Suze: Want to know the cute thing. I don't care that we're talking 275 00:16:46,429 --> 00:16:48,969 Suze: about other things today. I just feel like it, right. 276 00:16:48,979 --> 00:16:56,030 Suze: Which is so I did post a picture of you, KT, Colo and me dancing, right? 277 00:16:57,320 --> 00:16:59,469 Suze: Dancing around the tree. That a really short one. 278 00:16:59,960 --> 00:17:04,819 Suze: All these people on the island came up to Colo 279 00:17:04,869 --> 00:17:06,959 Suze: who knew they were all on the women and money 280 00:17:06,969 --> 00:17:10,459 Suze: community app came up to Colo and said, I didn't know you ciud 281 00:17:10,469 --> 00:17:13,270 KT: We didn't know you can dance because he's Latino and 282 00:17:13,280 --> 00:17:17,300 KT: what a great dancer and he never dances with us 283 00:17:17,505 --> 00:17:19,364 KT: but he danced. I mean, 284 00:17:19,834 --> 00:17:22,814 Suze: I didn't post that picture. I didn't post that video. 285 00:17:22,824 --> 00:17:24,645 Suze: I posted the one of the three of us. 286 00:17:24,704 --> 00:17:26,655 KT: But not the one of him and me in the 287 00:17:27,425 --> 00:17:29,063 KT: he was doing merengue. 288 00:17:29,785 --> 00:17:31,474 Suze: Now they're all going to write in and ask me 289 00:17:31,484 --> 00:17:31,994 Suze: to post it. 290 00:17:32,005 --> 00:17:34,675 KT: No, no, no. We have to wait until next year. 291 00:17:35,260 --> 00:17:37,400 Suze: Oh God. OK. Are we ready? 292 00:17:37,680 --> 00:17:41,958 KT: OK. So I'm gonna start over for Angelique. Happy New Year. 293 00:17:41,969 --> 00:17:44,689 KT: I hope you're doing well. I love the updates on 294 00:17:44,699 --> 00:17:48,069 KT: the women and Money app. Feel free to keep them coming. 295 00:17:48,290 --> 00:17:52,719 KT: We talked about the need to reinvest your dividends. But 296 00:17:52,729 --> 00:17:55,879 KT: do you need to reinvest your dividend in the stock 297 00:17:55,890 --> 00:17:59,760 KT: that generated it? How about buying something else with it 298 00:17:59,770 --> 00:18:00,479 KT: that also 299 00:18:00,564 --> 00:18:04,744 KT: generates dividends? So I I I didn't know the answer to that. 300 00:18:04,755 --> 00:18:08,064 KT: I asked Suze, what do we do with ours. 301 00:18:08,074 --> 00:18:12,344 Suze: So normally what happens is when you buy an individual 302 00:18:12,354 --> 00:18:17,063 Suze: company or even an ETF especially if you're doing it online. 303 00:18:17,234 --> 00:18:19,064 Suze: There's a little thing that says, do you want to 304 00:18:19,074 --> 00:18:23,474 Suze: reinvest dividends or not? If you click that and say yes, 305 00:18:23,484 --> 00:18:25,734 Suze: which I always do, 306 00:18:26,020 --> 00:18:29,699 Suze: then that dividend goes directly back into the company that 307 00:18:29,709 --> 00:18:32,719 Suze: you're in buying more shares. 308 00:18:33,430 --> 00:18:36,770 Suze: If you were to say no, that dividend will be 309 00:18:36,780 --> 00:18:39,930 Suze: paid out to you in money. And then if you 310 00:18:39,939 --> 00:18:43,180 Suze: wanted to, you could take that and buy more of 311 00:18:43,189 --> 00:18:46,050 Suze: a different stock with it or a new stock. But 312 00:18:46,060 --> 00:18:49,969 Suze: truthfully the way that it's meant to really work for 313 00:18:49,979 --> 00:18:55,030 Suze: your advantage is just reinvest the dividend in the company 314 00:18:55,040 --> 00:18:59,599 Suze: that you already own. So I would do that if 315 00:18:59,609 --> 00:19:01,609 Suze: I were you, but you can do the other if 316 00:19:01,619 --> 00:19:02,089 Suze: you want 317 00:19:02,420 --> 00:19:05,719 Suze: but let's not be smart and that's not staying smart 318 00:19:05,729 --> 00:19:06,500 Suze: just saying. 319 00:19:06,739 --> 00:19:10,948 KT: Ok, next question from Donna. Hey Suze and KT, my 320 00:19:10,959 --> 00:19:15,310 KT: son received some money for Christmas a few thousand dollars. He's wondering 321 00:19:15,469 --> 00:19:18,010 KT: if he should use it for paying down some of 322 00:19:18,020 --> 00:19:21,599 KT: his student loan or use it to pay off his 323 00:19:21,609 --> 00:19:22,530 KT: auto loan. 324 00:19:22,969 --> 00:19:26,760 KT: So he mentioned that his student loan interest could be 325 00:19:26,770 --> 00:19:30,790 KT: used as a deduction on his tax return. And he 326 00:19:30,800 --> 00:19:33,140 KT: would like to pay off the auto loan, which I 327 00:19:33,150 --> 00:19:36,310 KT: think will be done in May '24 is what he said. 328 00:19:36,630 --> 00:19:39,479 KT: So that he has one less loan to worry about. 329 00:19:39,699 --> 00:19:42,209 KT: I kind of agree with him, but I'm not sure. 330 00:19:42,400 --> 00:19:45,599 KT: So they're wondering, should he pay off the highest interest 331 00:19:45,609 --> 00:19:46,688 KT: rate or not? 332 00:19:46,699 --> 00:19:54,729 Suze: Well, he's absolutely right. Number one, I was gonna say 333 00:19:54,739 --> 00:19:58,969 Suze: he's absolutely right. In terms of a student loan, the 334 00:19:58,979 --> 00:19:59,760 Suze: interest of a 335 00:19:59,829 --> 00:20:06,488 Suze: student loan up to $2500 everybody is tax deductible so 336 00:20:06,500 --> 00:20:10,050 Suze: the interest can be taken off against your income. But 337 00:20:10,060 --> 00:20:13,930 Suze: that's only true for people who are single and they're 338 00:20:13,939 --> 00:20:18,790 Suze: making KT under $80,000 a year of adjusted gross income. 339 00:20:18,900 --> 00:20:23,380 Suze: It phases out, I think for 2024 at 95,000. And 340 00:20:23,390 --> 00:20:27,169 Suze: if you're married finally, jointly, it's 165 to 195. 341 00:20:27,520 --> 00:20:29,819 Suze: You know, so you could do that if you had 342 00:20:29,829 --> 00:20:33,900 Suze: $2500 of interest, if all you had was $600 of interest, 343 00:20:33,910 --> 00:20:35,979 Suze: that would be the max you could take off them. 344 00:20:36,349 --> 00:20:39,859 Suze: So he's right. He can do that. 345 00:20:40,630 --> 00:20:43,829 Suze: But the truth of the matter is he's also right 346 00:20:43,839 --> 00:20:47,250 Suze: about his car loan. Let him get rid of that 347 00:20:47,260 --> 00:20:50,810 Suze: car loan. It's gonna be paid off in a few months. Anyway, 348 00:20:50,819 --> 00:20:54,869 Suze: chances are his student loan goes on and on for 349 00:20:54,880 --> 00:20:58,339 Suze: probably 10 years, maybe 20 years or longer. Who knows? 350 00:20:58,560 --> 00:21:01,199 Suze: And he would then take that money however, 351 00:21:01,849 --> 00:21:05,319 Suze: and he would take it and rather than saving it 352 00:21:05,329 --> 00:21:08,709 Suze: or doing something like that, I would take that money 353 00:21:08,760 --> 00:21:12,469 Suze: and I would put it towards my student loan to 354 00:21:12,479 --> 00:21:16,469 Suze: get me out of student loan debt. Because remember in 355 00:21:16,479 --> 00:21:21,550 Suze: most cases, student loan debt is not dischargeable in bankruptcy. 356 00:21:21,650 --> 00:21:24,040 KT: So he's young. It's good. It's a good move. He 357 00:21:24,050 --> 00:21:24,719 KT: was right. 358 00:21:24,979 --> 00:21:28,790 Suze: He's right about that. But chances are KT in his mind, 359 00:21:28,800 --> 00:21:32,229 Suze: he's thinking, oh, I don't have a car payment anymore. 360 00:21:32,410 --> 00:21:34,790 Suze: So I'll take that car payment and I'll do this 361 00:21:34,800 --> 00:21:38,150 Suze: with it or I'll do that with it. But the 362 00:21:38,160 --> 00:21:41,339 Suze: correct advice is when you have student loan debt, 363 00:21:41,859 --> 00:21:45,339 Suze: you've paid off another debt, whatever you could afford to 364 00:21:45,349 --> 00:21:48,010 Suze: pay on that other debt. Now take that and put 365 00:21:48,020 --> 00:21:51,160 Suze: it towards your student loan and get rid of that 366 00:21:51,170 --> 00:21:54,670 Suze: student loan as fast as you can. Well, because you know, 367 00:21:54,680 --> 00:21:57,300 Suze: a lot of people KT think, but I can afford 368 00:21:57,310 --> 00:22:00,040 Suze: the payment on the student loan. It's not that big 369 00:22:00,050 --> 00:22:02,709 Suze: of a deal. Then all of a sudden they get sick, 370 00:22:02,795 --> 00:22:06,435 Suze: they're in an accident, something happens, they lose their job, 371 00:22:06,444 --> 00:22:09,405 Suze: they can't afford to pay their student loan payment anymore. 372 00:22:09,435 --> 00:22:11,255 Suze: So they think that's not a big deal. It just 373 00:22:11,265 --> 00:22:15,614 Suze: goes into deferment or forbearance or you know, or default 374 00:22:15,625 --> 00:22:18,665 Suze: whatever it may be and then it doubles and doubles 375 00:22:18,675 --> 00:22:22,015 Suze: and doubles and then it's mandatory. So, no, get rid 376 00:22:22,025 --> 00:22:23,614 Suze: of that student loan debt. All right. 377 00:22:23,890 --> 00:22:26,709 KT: And it follows your family too, doesn't it? 378 00:22:26,719 --> 00:22:29,390 Suze: Depends on the type of they have. Ok. 379 00:22:29,400 --> 00:22:33,880 KT: Next question from Christina dear Suze and KT I am 380 00:22:33,890 --> 00:22:36,510 KT: a weekly listener. I've learned so much from you in 381 00:22:36,520 --> 00:22:40,469 KT: the past few years. Thank you for sharing your immense 382 00:22:40,479 --> 00:22:44,599 KT: wealth of knowledge with your community. My beloved sister in 383 00:22:44,609 --> 00:22:49,819 KT: law recently lost her battle with cancer in August last year. 384 00:22:50,339 --> 00:22:54,800 KT: She said my brother in law has twin teenage girls 385 00:22:54,810 --> 00:22:58,719 KT: and they inherited money from a life insurance policy after 386 00:22:58,729 --> 00:23:03,000 KT: the mom's passing. He visited us during Christmas and he 387 00:23:03,010 --> 00:23:03,920 KT: told me, 388 00:23:04,290 --> 00:23:04,520 Suze: Go on... 389 00:23:04,530 --> 00:23:08,300 KT: he told me that his financial advisor, you ready everybody? 390 00:23:09,119 --> 00:23:11,949 KT: This is, I know this is so sad. The financial 391 00:23:11,959 --> 00:23:16,448 KT: advisor invested the girls, their teenagers, the girl's inheritance and 392 00:23:16,459 --> 00:23:19,199 KT: whole life insurance policy. 393 00:23:19,859 --> 00:23:23,359 KT: Christina said, Suze, it was a recent decision. I'm hoping 394 00:23:23,369 --> 00:23:26,050 KT: it isn't too much of a loss to cancel the 395 00:23:26,060 --> 00:23:31,119 KT: policies and reinvest in something else. Can he cancel the 396 00:23:31,130 --> 00:23:37,719 KT: whole life policies without large penalties? And then you know, 397 00:23:37,729 --> 00:23:40,880 KT: they have college funds, those costs are covered but there's 398 00:23:40,890 --> 00:23:43,829 KT: so many other great things for the teenage girls. Right? 399 00:23:43,839 --> 00:23:46,859 Suze: The main thing again, I'm gonna say to all of 400 00:23:46,869 --> 00:23:49,479 Suze: you and you need to write this down. 401 00:23:49,810 --> 00:23:53,938 Suze: You are to do nothing other than keep your money 402 00:23:54,160 --> 00:23:57,020 Suze: or your kids money. I don't care whose money it 403 00:23:57,030 --> 00:24:01,030 Suze: is but you are to absolutely do nothing with inherited 404 00:24:01,040 --> 00:24:04,698 Suze: money after you have suffered the loss of a loved one. 405 00:24:05,150 --> 00:24:09,140 Suze: I don't care if it's death or divorce. Just keep 406 00:24:09,150 --> 00:24:11,900 Suze: the money safe and sound if you have debt. If 407 00:24:11,910 --> 00:24:14,349 Suze: you have things like that. Ok. Pay it off, 408 00:24:14,900 --> 00:24:17,500 Suze: but you never make a decision right away because you 409 00:24:17,510 --> 00:24:19,729 Suze: may think that you're in your body and you are 410 00:24:19,739 --> 00:24:25,300 Suze: not shame, shame, shame on this financial advisor. Why do 411 00:24:25,310 --> 00:24:28,280 Suze: I have a feeling that this financial advisor also is 412 00:24:28,290 --> 00:24:33,429 Suze: the same person who sold the insurance policy to your 413 00:24:33,439 --> 00:24:37,380 Suze: sister in law. Just have a feeling on that most 414 00:24:37,390 --> 00:24:42,439 Suze: whole life policies and insurance investments like that 415 00:24:42,979 --> 00:24:46,640 Suze: have what's called a free look, period, but it's only 416 00:24:46,650 --> 00:24:52,149 Suze: 10 to 30 days and that's it. So if you 417 00:24:52,160 --> 00:24:56,140 Suze: are listening to me now, you are to go to 418 00:24:56,150 --> 00:24:59,589 Suze: papa bear here who suffered this loss. 419 00:25:00,510 --> 00:25:01,020 Suze: And 420 00:25:01,959 --> 00:25:04,540 Suze: I want to talk to him directly. Now, 421 00:25:05,199 --> 00:25:06,780 Suze: your kids are young 422 00:25:07,650 --> 00:25:13,689 Suze: and that money if invested properly could grow and grow 423 00:25:13,739 --> 00:25:17,050 Suze: and grow and really take care of them possibly for 424 00:25:17,060 --> 00:25:19,060 Suze: the rest of their lives. 425 00:25:19,800 --> 00:25:23,310 Suze: But it will never ever do that in a whole 426 00:25:23,319 --> 00:25:24,819 Suze: life insurance policy. 427 00:25:25,579 --> 00:25:29,689 Suze: It is a travesty that this financial advisor, in my opinion. 428 00:25:29,699 --> 00:25:35,920 Suze: Absolutely took advantage of your teen age daughters, the twins 429 00:25:36,069 --> 00:25:39,579 Suze: because they do not need an insurance policy on them. 430 00:25:39,650 --> 00:25:44,439 Suze: Nobody is financially dependent upon them and I'm sure you 431 00:25:44,449 --> 00:25:48,280 Suze: just went along with it because this person seemed like 432 00:25:48,290 --> 00:25:51,000 Suze: they knew what they were saying. Whatever. Did you ever 433 00:25:51,010 --> 00:25:53,359 Suze: ask him? What kind of commission 434 00:25:53,800 --> 00:25:56,419 Suze: he or she made on that? You might want to 435 00:25:56,430 --> 00:26:00,359 Suze: ask them that question if you go to them and 436 00:26:00,369 --> 00:26:04,489 Suze: they say your past your free look, period. If you 437 00:26:04,500 --> 00:26:08,459 Suze: took the money out now, there's nothing we could do. 438 00:26:08,469 --> 00:26:12,500 Suze: You might suffer a 25% loss of everything you gave them. 439 00:26:12,770 --> 00:26:15,829 Suze: I would go to that person's manager. I would go 440 00:26:15,839 --> 00:26:20,829 Suze: wherever I could and say I suffered the loss of 441 00:26:20,839 --> 00:26:24,569 Suze: my wife and this is what you do to me. 442 00:26:24,770 --> 00:26:30,089 Suze: I would absolutely make them give me my money back 443 00:26:30,099 --> 00:26:32,228 Suze: and again, just put it in a money market account 444 00:26:32,239 --> 00:26:35,750 Suze: for now. Interest rates are ok. You want to secure 445 00:26:35,760 --> 00:26:37,819 Suze: it in a CD or whatever? Ok. 446 00:26:38,199 --> 00:26:41,209 Suze: But just sit on it and be safe for a 447 00:26:41,219 --> 00:26:42,699 Suze: right now. 448 00:26:43,890 --> 00:26:48,119 Suze: I hate things like this. I know. I know. And 449 00:26:48,140 --> 00:26:51,400 Suze: I think the best advice to listen to that you 450 00:26:51,410 --> 00:26:54,718 Suze: give that over and over again is when you suffer 451 00:26:54,729 --> 00:26:58,550 Suze: a loss, regardless of what kind of loss don't do 452 00:26:58,560 --> 00:27:02,020 Suze: anything right away other than keeping your money safe and sound, 453 00:27:02,459 --> 00:27:04,140 Suze: I'm so so sorry. Yeah. 454 00:27:04,910 --> 00:27:09,599 KT: Ok. So my last question is from Gigi. She said 455 00:27:09,609 --> 00:27:13,000 KT: dear Suze, I love you. Ok, Gigi, I, I love 456 00:27:13,010 --> 00:27:15,569 KT: her too. I am 66 and a half. 457 00:27:16,150 --> 00:27:16,160 Suze: How much do you love me? 458 00:27:16,719 --> 00:27:23,188 KT: A lot. But Gigi really loves you too. I'm 66 and a half and single. 459 00:27:23,319 --> 00:27:24,709 KT: She wants you to know that 460 00:27:25,040 --> 00:27:29,550 KT: when I begin to take RMD, starting at 73 I 461 00:27:29,560 --> 00:27:32,989 KT: believe I can take the required amount in kind. That 462 00:27:33,000 --> 00:27:37,260 KT: is move VTI I tock in the correct amount from 463 00:27:37,270 --> 00:27:43,020 KT: Fidelity traditional IRA to a Fidelity taxable account, paying tax 464 00:27:43,030 --> 00:27:48,109 KT: on the amount transferred. Rather than moving the in kind 465 00:27:48,119 --> 00:27:49,339 KT: distribution 466 00:27:49,619 --> 00:27:53,659 KT: to a Fidelity taxable account. Could I move it to 467 00:27:53,670 --> 00:27:56,079 KT: my Fidelity Roth IRA? 468 00:27:56,130 --> 00:28:00,208 Suze: No. Ok. So for those of you who don't have 469 00:28:00,219 --> 00:28:03,639 Suze: a clue what KT was just saying. First of all, 470 00:28:03,650 --> 00:28:06,520 Suze: VTI is an exchange traded fund 471 00:28:06,800 --> 00:28:11,339 Suze: that stands for the Vanguard Total Stock Market Index ETF 472 00:28:11,430 --> 00:28:14,250 Suze: and it's where we have been saying to invest money 473 00:28:14,260 --> 00:28:17,199 Suze: now for the past three years, especially if you don't 474 00:28:17,209 --> 00:28:20,500 Suze: know how to pick individual stocks, but there's about 2000 475 00:28:20,510 --> 00:28:24,569 Suze: stocks in there. So it gives you tremendous diversification. Although 476 00:28:24,699 --> 00:28:28,239 Suze: there are some arguments right now that say not being 477 00:28:28,250 --> 00:28:32,650 Suze: so diversified will give you more money than being that diversified. 478 00:28:32,729 --> 00:28:35,390 Suze: But that's still an argument that has been yet to 479 00:28:35,400 --> 00:28:36,659 Suze: be settled. 480 00:28:36,890 --> 00:28:41,829 Suze: Required minimum distributions mean once you turn a specific age, 481 00:28:41,959 --> 00:28:46,890 Suze: it's 73 and this year I will be 73. So 482 00:28:46,900 --> 00:28:51,150 Suze: I will have to take required minimum distributions and required 483 00:28:51,160 --> 00:28:55,229 Suze: minimum distributions are simply if you have a pre taxed 484 00:28:55,239 --> 00:28:56,430 Suze: retirement account. 485 00:28:57,040 --> 00:29:00,479 Suze: According to a life expectancy table, we all have to 486 00:29:00,489 --> 00:29:05,050 Suze: take out a specific sum of money every single year 487 00:29:05,060 --> 00:29:08,750 Suze: that they determine that the life expectancy. It's all figured 488 00:29:08,760 --> 00:29:13,219 Suze: out for you. What Gigi is asking is she has 489 00:29:13,229 --> 00:29:18,180 Suze: her money within her retirement account currently invested in the 490 00:29:18,189 --> 00:29:22,500 Suze: Vanguard Total Stock Market Index ETF she wants to know 491 00:29:22,689 --> 00:29:24,020 Suze: if she can take 492 00:29:24,550 --> 00:29:30,030 Suze: her required minimum distribution in the amount of VTI that 493 00:29:30,040 --> 00:29:34,430 Suze: she needs to withdraw and put that as shares of 494 00:29:34,439 --> 00:29:37,439 Suze: VTI in her Roth IRA. 495 00:29:38,270 --> 00:29:43,250 Suze: And the answer to that is no, you cannot, she could. However, 496 00:29:43,260 --> 00:29:47,569 Suze: if she wanted to take it in kind and put 497 00:29:47,579 --> 00:29:52,839 Suze: it into a regular investment account, paying taxes on it 498 00:29:52,949 --> 00:29:57,089 Suze: and it could stay in there as that, but you 499 00:29:57,099 --> 00:30:00,719 Suze: cannot do it to a Roth IRA. 500 00:30:01,170 --> 00:30:03,260 KT: OK. Is it quizzy time, Suze? 501 00:30:03,270 --> 00:30:07,810 Suze: All right, KT it is quizzy time. So we're starting out with 2024... 502 00:30:08,775 --> 00:30:11,925 KT: Now this isn't just for me. Everyone listening. It's for 503 00:30:11,935 --> 00:30:16,064 KT: you too. So she's gonna ask a quizzy. I usually 504 00:30:16,074 --> 00:30:18,045 KT: get it wrong. Let's see if I get it right 505 00:30:18,055 --> 00:30:21,545 KT: starting this lucky year of mine. But listen up, see 506 00:30:21,555 --> 00:30:23,954 KT: if you, you know the answer. What is it? 507 00:30:23,964 --> 00:30:27,635 Suze: I'm asking all of you, especially KT because I can 508 00:30:27,645 --> 00:30:32,435 Suze: hear her answer a question that all of you may 509 00:30:32,444 --> 00:30:36,194 Suze: have that you need to know the answer to. 510 00:30:37,410 --> 00:30:41,280 Suze: All right, this is from Joanne. She says right now 511 00:30:42,040 --> 00:30:45,390 Suze: I have a three year treasury note 512 00:30:46,459 --> 00:30:58,420 Suze: at 2.625% that matures in April 2025 for $25,000. Ok? 513 00:30:59,069 --> 00:31:03,319 Suze: She would like to get an Alliant CD with the money. 514 00:31:04,069 --> 00:31:09,609 Suze: But if she sells the note right now, she's going 515 00:31:09,619 --> 00:31:11,319 Suze: to take a loss. 516 00:31:12,030 --> 00:31:15,589 Suze: So is it worth it for her to sell 517 00:31:16,819 --> 00:31:20,000 Suze: a three year treasury note that she got a while 518 00:31:20,010 --> 00:31:24,800 Suze: ago that matures right in April of 2025. So it 519 00:31:24,810 --> 00:31:29,199 Suze: matures in about another 455 days, something like that. But 520 00:31:29,209 --> 00:31:33,359 Suze: it only pays her 2.625%. 521 00:31:34,099 --> 00:31:35,640 Suze: Should she sell it 522 00:31:36,290 --> 00:31:41,430 Suze: and reinvest that money in an alliance certificate of deposit 523 00:31:42,109 --> 00:31:44,910 Suze: at about 5.3%. 524 00:31:45,640 --> 00:31:51,020 Suze: Now, remember KT, when interest rates go up as they 525 00:31:51,030 --> 00:31:56,180 Suze: have right now, the value of what you bought goes down. 526 00:31:56,680 --> 00:32:00,979 Suze: So the treasury note that she bought is worth less 527 00:32:01,270 --> 00:32:04,979 Suze: than what she put into it. Should she sell it 528 00:32:05,030 --> 00:32:06,489 Suze: or not? 529 00:32:09,819 --> 00:32:17,449 KT: Well, if she's only getting 2.625% in 2025 right? 530 00:32:19,119 --> 00:32:25,650 Suze: All the way till 2025. So she's making about $656 531 00:32:25,660 --> 00:32:29,859 Suze: a year in interest on that. Now, all of you 532 00:32:29,869 --> 00:32:32,560 Suze: need to figure this out because a lot of you 533 00:32:32,569 --> 00:32:35,060 Suze: happen to be in this situation. 534 00:32:36,040 --> 00:32:38,750 Suze: So the first step would be what KT, if this 535 00:32:38,760 --> 00:32:41,209 Suze: were you, what would be your first step you would do? 536 00:32:41,219 --> 00:32:43,300 KT: I'd do a little calculation here. 537 00:32:43,430 --> 00:32:46,329 Suze: The first step should be, you would call your finance 538 00:32:46,339 --> 00:32:50,989 Suze: person or whoever you bought this from and ask them, 539 00:32:51,000 --> 00:32:55,540 Suze: what is that Treasury note worth? If I were to 540 00:32:55,550 --> 00:32:56,180 Suze: sell it, 541 00:32:57,270 --> 00:33:01,609 Suze: then you would be able to figure it out from there. 542 00:33:01,619 --> 00:33:05,910 Suze: Which one made more sense. But just going on your gut. 543 00:33:05,920 --> 00:33:11,790 KT: My gut, my gut says, go for the CD at Alliant... 5.3%. 544 00:33:11,949 --> 00:33:12,109 Suze: Ding. 545 00:33:12,750 --> 00:33:13,500 KT: Why wouldn't I? 546 00:33:13,540 --> 00:33:18,589 Suze: The New Year bells are ringing for you. Ding, ding, ding, 547 00:33:18,619 --> 00:33:22,939 Suze: listen to me, everybody. KT is correct. What would you 548 00:33:22,949 --> 00:33:24,119 Suze: have done? 549 00:33:24,520 --> 00:33:28,699 Suze: So I happened to answer Joanne directly because I saw 550 00:33:28,709 --> 00:33:32,260 Suze: this particular email when I was looking for a quizzy 551 00:33:32,270 --> 00:33:36,180 Suze: for KT and I asked her to please call and 552 00:33:36,189 --> 00:33:40,670 Suze: find out what would they pay her for the three 553 00:33:40,680 --> 00:33:43,619 Suze: year treasury? And it turned out that they would pay 554 00:33:43,630 --> 00:33:47,829 Suze: her the $25,000 that she invested. She would get back 555 00:33:47,839 --> 00:33:52,540 Suze: only $24,360. Ok? 556 00:33:52,949 --> 00:33:57,209 Suze: But if you did the math right, if she then 557 00:33:57,219 --> 00:34:01,670 Suze: took that 24,360 let's say, and put it into an 558 00:34:01,680 --> 00:34:06,939 Suze: 18 month at Alliant Credit Union at 18 months or hopefully, 559 00:34:06,949 --> 00:34:10,169 Suze: I asked her to lock it in for 23 months 560 00:34:10,379 --> 00:34:16,330 Suze: at that. She would be making $1291 a year 561 00:34:16,949 --> 00:34:22,050 Suze: versus $656 a year, which is what she's making in 562 00:34:22,060 --> 00:34:27,719 Suze: the current treasury that she's in right now. Given that 563 00:34:27,729 --> 00:34:31,770 Suze: it's such a small penalty. She should do this faster 564 00:34:31,780 --> 00:34:36,260 Suze: than a New York minute. And you will come out 565 00:34:36,270 --> 00:34:40,770 Suze: seriously ahead in the long run. A lot of you 566 00:34:40,780 --> 00:34:43,270 Suze: may be thinking about Suze, why doesn't she just stay 567 00:34:43,280 --> 00:34:46,259 Suze: there until it matures? 568 00:34:46,830 --> 00:34:51,300 Suze: And because if she waits another 455 days or whatever 569 00:34:51,310 --> 00:34:55,699 Suze: it is, interest rates may be even lower. So when 570 00:34:55,709 --> 00:34:58,750 Suze: it matures and she comes out of it, then what 571 00:34:58,760 --> 00:35:03,610 Suze: is she gonna do? So lock in again? Remember, you 572 00:35:03,620 --> 00:35:07,069 Suze: can lock in at Alliant Credit Union by going to 573 00:35:07,080 --> 00:35:09,929 Suze: my alliant.com 574 00:35:10,399 --> 00:35:14,540 Suze: and you can lock in for 18 to 23 months. 575 00:35:14,550 --> 00:35:19,859 Suze: You choose the maturity anytime in between there for currently 5.3% 576 00:35:19,909 --> 00:35:26,810 Suze: or 5.35% for amounts of $75,000 or more. A two 577 00:35:26,820 --> 00:35:30,979 Suze: year treasury is a full 1% under that. 578 00:35:31,520 --> 00:35:34,739 Suze: So don't even bother talking to me about if you're 579 00:35:34,750 --> 00:35:37,600 Suze: in a high income tax bracket in a state that 580 00:35:37,610 --> 00:35:42,259 Suze: you live in, you're still better off with the CD 581 00:35:42,600 --> 00:35:43,949 Suze: at Alliant. 582 00:35:44,760 --> 00:35:47,500 Suze: All right, KT... what do you think? 583 00:35:49,840 --> 00:35:51,979 KT: Tell us about the year you think? Give us a 584 00:35:51,989 --> 00:35:54,169 KT: little bit of a thought of the year ahead. 585 00:35:54,250 --> 00:35:56,439 Suze: I'm not gonna do that today. I'll do that on 586 00:35:56,449 --> 00:36:02,780 Suze: Sunday for Suze school, but we do have the end 587 00:36:02,790 --> 00:36:07,120 Suze: of the podcast and this is how we're going to 588 00:36:07,129 --> 00:36:10,260 Suze: be ending the podcast for this year. 589 00:36:10,949 --> 00:36:12,489 Suze: This is the year 590 00:36:13,340 --> 00:36:16,719 Suze: that when it comes to your money. We want you to... 591 00:36:16,850 --> 00:36:20,149 KT: Be smart and stay smart. 592 00:36:20,320 --> 00:36:25,560 Suze: And if you do that, we promise you you will 593 00:36:25,570 --> 00:36:28,459 Suze: be unstoppable.