WEBVTT - When Do You Know You're Doing Everything Wrong? 0:00:08.300 --> 0:00:10.199 Hi everybody. Good morning, Suze. 0:00:10.300 --> 0:00:12.739 It is always a good morning with you, Ms. Travis. 0:00:13.100 --> 0:00:15.909 It's July 26, 2026. 0:00:16.299 --> 0:00:16.347 No it's not, no it's not! 0:00:16.347 --> 0:00:20.219 Wait, wait, wait, wait, wait. OK, so we pre-recorded this 0:00:20.219 --> 0:00:23.620 podcast before we left for our trip. 0:00:23.989 --> 0:00:25.219 To Italy, Ciao Bella! 0:00:25.799 --> 0:00:30.620 For her birthday. This is another Ask KT and Anything 0:00:30.620 --> 0:00:34.830 combined with Suze School. Now why do I say that? 0:00:35.119 --> 0:00:39.880 Because some questions require more of a detailed explanation. It's 0:00:39.880 --> 0:00:41.900 more like a teaching part. 0:00:42.229 --> 0:00:45.319 And others are just kind of answers to people's questions. 0:00:45.400 --> 0:00:51.400 So therefore we're combining them kind of together. But are 0:00:51.400 --> 0:00:52.119 you ready, KT? 0:00:52.130 --> 0:00:56.360 I'm ready. So that's how I'm opening today's podcast. On 0:00:56.360 --> 0:00:59.619 the Women and Money app. I got another little series 0:00:59.619 --> 0:01:00.880 of questions, but this one 0:01:00.955 --> 0:01:05.355 in particular, I think is really important. It says, Suze, 0:01:05.555 --> 0:01:10.154 when is the last calendar day I can contribute to 0:01:10.154 --> 0:01:12.214 a solo 401k? 0:01:12.514 --> 0:01:15.154 Yeah, I'm kicking myself because KT, I should have had 0:01:15.154 --> 0:01:18.525 that in the master class two weeks ago. What was 0:01:18.525 --> 0:01:19.613 I thinking? 0:01:20.000 --> 0:01:23.239 But here's what you need to get, all right. You 0:01:23.239 --> 0:01:25.559 have to open, and by the way, if you don't 0:01:25.559 --> 0:01:28.760 know what I'm talking about with a solo 401k or 0:01:28.760 --> 0:01:33.900 a SEP IRA, go back two weeks from today and 0:01:33.900 --> 0:01:39.720 listen to the master class on solo 401ks versus SEP IRAs, 0:01:39.940 --> 0:01:43.260 and you'll find out that if you're self-employed, you are 0:01:43.260 --> 0:01:48.500 crazy in most cases not to have a solo 401k. However, 0:01:48.580 --> 0:01:53.139 the last day that you can open a solo 401k, 0:01:53.419 --> 0:01:57.589 is December 31st, let's say this year, if you are 0:01:57.589 --> 0:02:02.019 gonna open up one for 2026, you have to have 0:02:02.019 --> 0:02:10.139 opened it up by December 31st, 2026. However, that doesn't 0:02:10.139 --> 0:02:16.259 mean that you have to fund it by December 31st, 2026. 0:02:16.339 --> 0:02:19.279 But here's what you need to know if you are 0:02:19.279 --> 0:02:21.600 a sole proprietor. 0:02:22.660 --> 0:02:25.259 When you open it up, and it has to be 0:02:25.258 --> 0:02:30.139 opened by December 31st, 2026 if it's for this year, 0:02:30.580 --> 0:02:34.138 you have to elect how much of your own salary 0:02:34.139 --> 0:02:37.820 deferral you are going to put in it. You don't 0:02:37.820 --> 0:02:42.059 have to do it. You just have to make that election. 0:02:42.470 --> 0:02:45.258 And you have for the actual money you have till 0:02:45.258 --> 0:02:48.759 the day that you file your taxes. So KT for 0:02:48.758 --> 0:02:56.160 2026 contributions that would be April 15th, 2027, or all 0:02:56.160 --> 0:03:00.839 the way, by the way, like we do till October 15th, 0:03:01.080 --> 0:03:07.240 2027 if you file an extension. However, here's what everybody 0:03:07.240 --> 0:03:10.800 needs to know because remember when you're self-employed, 0:03:11.490 --> 0:03:13.529 you have two ways to go. You can be a 0:03:13.529 --> 0:03:19.508 sole proprietor, right, KT? Or you could form an S corporation. OK. Now, 0:03:20.050 --> 0:03:24.850 if you're an S corporation, and you pay yourself a paycheck, 0:03:24.929 --> 0:03:27.929 a W-2, which chances are you will, 0:03:28.460 --> 0:03:33.418 then your employee contribution, your employee has to come out 0:03:33.419 --> 0:03:37.619 of that paycheck through your payroll, and that has to 0:03:37.619 --> 0:03:44.559 be done by December 31st of this year. No extension, nothing. 0:03:44.820 --> 0:03:48.000 Your employer hat or your employer contribution 0:03:48.514 --> 0:03:52.395 can still wait until you file. Now how is that 0:03:52.395 --> 0:03:55.914 for complication, KT? That was a little mini Suze School. 0:03:56.145 --> 0:04:00.735 Suze, tell everyone what is the difference between an S 0:04:00.735 --> 0:04:03.235 corp and a sole proprietorship. 0:04:03.345 --> 0:04:06.065 All right, so before I go to an S corp, everybody, 0:04:06.315 --> 0:04:08.035 let's just start simple. 0:04:08.839 --> 0:04:13.759 A sole proprietorship. I always want you to think of 0:04:13.759 --> 0:04:18.600 the name of something. A sole proprietorship means it is 0:04:18.600 --> 0:04:22.760 just you. So maybe you're a freelance, you consult, you 0:04:22.760 --> 0:04:27.380 sell things, and you've never filed any other special paperwork, 0:04:27.480 --> 0:04:32.140 all right? It's just you and your business, same person. 0:04:32.559 --> 0:04:34.420 The business makes $1. 0:04:34.850 --> 0:04:38.019 And that $1 is yours and it goes right in 0:04:38.019 --> 0:04:42.880 your personal tax return. Now, you may think that's just great, everybody, 0:04:43.260 --> 0:04:46.820 but you probably didn't know that on that money, on 0:04:46.820 --> 0:04:50.519 the profit, you're paying self-employment tax. 0:04:51.570 --> 0:04:57.890 That's Social Security and Medicare, a little over 15% on 0:04:57.890 --> 0:05:03.920 every dollar that you make. That's essentially how it is. So, 0:05:03.928 --> 0:05:08.369 that's a sole proprietorship, very easy. You and your business 0:05:08.369 --> 0:05:11.899 are one. But when you form an S corp, 0:05:12.859 --> 0:05:16.859 you are not one with your business. The S Corp 0:05:16.859 --> 0:05:22.260 is a separate business. It's not just you anymore, and you, everybody, 0:05:22.339 --> 0:05:26.570 you become its employee. So therefore, you have to pay 0:05:26.570 --> 0:05:31.618 yourself a real salary, like a paycheck, a W-2, just 0:05:31.619 --> 0:05:37.100 like you work for anybody else. However, you only pay 0:05:37.100 --> 0:05:40.859 Social Security and Medicare tax on your salary. 0:05:41.359 --> 0:05:45.488 But the profit above your salary that comes to you 0:05:45.488 --> 0:05:51.000 as a distribution, so there is no self-employment tax on it, none. 0:05:51.450 --> 0:05:55.869 So bottom line, if your business is making serious money, 0:05:56.269 --> 0:06:01.250 an S corp saves you thousands in payroll taxes every 0:06:01.250 --> 0:06:02.450 single year. 0:06:03.350 --> 0:06:07.279 So KT, you tell everybody in your opinion, why doesn't 0:06:07.279 --> 0:06:08.219 everybody do that? 0:06:08.559 --> 0:06:12.440 S corps aren't that easy. All right, there's benefits, but 0:06:12.440 --> 0:06:15.920 it costs you money, everybody. You have to set up 0:06:15.920 --> 0:06:20.678 payroll services. You need a separate tax return, and the 0:06:20.678 --> 0:06:24.200 IRS really takes a look to make sure your salary 0:06:24.200 --> 0:06:27.238 is reasonable, so you can't get away with anything. 0:06:27.678 --> 0:06:31.950 You can't pay yourself $10,000, everybody and then take 0:06:31.950 --> 0:06:37.010 $200,000 in distributions. They will come after you for that. 0:06:37.290 --> 0:06:41.118 So KT tell everybody who should do in your opinion, 0:06:41.209 --> 0:06:44.308 an S corp versus a sole proprietor. 0:06:44.519 --> 0:06:46.850 If you're just starting out, let's say you're a hairdresser, 0:06:46.928 --> 0:06:50.570 you're just starting out, you're making modest profits. A sole 0:06:50.570 --> 0:06:54.170 proprietor is fine. It's simple. It's clean. It's actually a 0:06:54.170 --> 0:06:55.730 whole lot easier. 0:06:56.100 --> 0:06:59.750 And, and a little less work in terms of filing 0:06:59.750 --> 0:07:01.159 and keeping track of everything. 0:07:01.160 --> 0:07:02.829 You're doing great so far. You're about to get a 0:07:02.829 --> 0:07:03.589 ding ding ding. 0:07:04.149 --> 0:07:06.989 Wait a minute. But Suze, if you start out and 0:07:06.988 --> 0:07:09.450 let's say you have a great idea for a business 0:07:09.790 --> 0:07:14.640 and that business after your first, second year starts to skyrocket, 0:07:14.980 --> 0:07:17.630 let's say it goes beyond your wildest dreams. 0:07:18.029 --> 0:07:21.549 Actually, KT, it's if, wait, if it goes beyond what 0:07:21.549 --> 0:07:25.510 a reasonable salary would be for you, that is the key. 0:07:26.140 --> 0:07:30.109 If a reasonable salary for you is X and all 0:07:30.109 --> 0:07:33.739 of a sudden you've made 2 or 3 x, that's 0:07:33.739 --> 0:07:38.230 when you consult a CPA and look into getting an 0:07:38.230 --> 0:07:41.950 S corp. Just that simple KT next question. 0:07:42.149 --> 0:07:45.750 OK, Suze, this next question is from Teresa, and I 0:07:45.750 --> 0:07:50.329 can tell you something. She watched the Suze Orman show 0:07:50.709 --> 0:07:53.130 because after reading this question, it is. 0:07:53.299 --> 0:07:56.380 Definitely a can I afford it question. 0:07:56.609 --> 0:07:58.420 Oh well, that's easy, denied. 0:07:59.459 --> 0:08:02.160 She said, Suze, I would like to buy a quiet 0:08:02.160 --> 0:08:08.220 luxury handbag in a basic color that is timeless, meaning 0:08:08.220 --> 0:08:10.380 I will keep it until I die. 0:08:11.459 --> 0:08:14.570 She said, I'm 67 years old. I am a teacher. 0:08:14.859 --> 0:08:19.079 I plan on retiring next year. I live in California 0:08:19.079 --> 0:08:23.739 and will retire with a decent educator's pension. So she said, 0:08:23.850 --> 0:08:28.779 right now, I have about $600,000 in a 403B. 0:08:29.170 --> 0:08:34.570 And a 457. I have $200,000 in a CD. I 0:08:34.570 --> 0:08:38.809 have $30,000 in savings, and my husband and I have 0:08:38.809 --> 0:08:44.729 a house fund for emergencies of about $16,000. The most 0:08:44.729 --> 0:08:50.650 I have ever spent on a handbag was $259. 0:08:51.000 --> 0:08:53.039 And that was for Dooney and Burke, which is a 0:08:53.039 --> 0:08:54.119 nice looking bag. 0:08:54.440 --> 0:08:55.840 I personally wouldn't know. 0:08:56.039 --> 0:08:59.780 OK, so she said, I would really like to own 0:08:59.780 --> 0:09:06.260 a nice designer bag, The Row, a Bottega Venita, Chanel, 0:09:06.880 --> 0:09:12.479 anything between $1,500 but no more than $3,000. What is 0:09:12.479 --> 0:09:13.799 your advice? 0:09:15.929 --> 0:09:16.630 Really? 0:09:17.450 --> 0:09:18.270 What's your advice? 0:09:18.380 --> 0:09:21.559 My advice is let's hear what KT has to say 0:09:21.559 --> 0:09:21.890 to you. 0:09:22.049 --> 0:09:25.409 OK, so Suze's asking me to answer this because she 0:09:25.409 --> 0:09:29.250 knows I worked in the luxury business for many years 0:09:29.250 --> 0:09:32.409 with all of these designer brands, and I have to 0:09:32.409 --> 0:09:35.969 tell you something. If I were you, Teresa, I would 0:09:35.969 --> 0:09:41.510 go to a consignment store or some of these online secondhand. 0:09:42.070 --> 0:09:46.369 You know, um, opportunities where you can get a beautiful 0:09:46.830 --> 0:09:50.789 designer bag for pennies on the dollar, and then you 0:09:50.789 --> 0:09:55.109 satisfy both needs. You keep saving and you have a 0:09:55.109 --> 0:09:57.630 designer bag that you really wanted. 0:09:57.869 --> 0:10:00.030 See, I knew you would give her the best answer. 0:10:00.099 --> 0:10:00.699 What do you think? 0:10:00.869 --> 0:10:04.659 Well, I think your answer is absolutely correct, but here's 0:10:04.659 --> 0:10:10.609 my concern. My concern is this, Teresa, you're 67 years 0:10:10.609 --> 0:10:16.650 of age. And you plan on retiring next year. That 0:10:16.650 --> 0:10:20.070 means your income, everything stops. 0:10:21.090 --> 0:10:24.579 And at the time of life when you're retiring, this 0:10:24.580 --> 0:10:30.848 is when you want a designer bag. Usually, especially women, 0:10:31.219 --> 0:10:35.340 when they approach retirement and they know income is going 0:10:35.340 --> 0:10:40.020 to stop, rather than spend, that's when they take their 0:10:40.020 --> 0:10:43.299 money and they wanna save, save, save. 0:10:43.950 --> 0:10:49.080 But not you. So it makes me wonder why, why 0:10:49.080 --> 0:10:53.839 at this point in your life, why is now the 0:10:53.840 --> 0:10:57.799 time that you want a designer bag? Hey, if you 0:10:57.799 --> 0:11:01.299 were 40, 50 right now, I'd say, yeah, go ahead. 0:11:01.640 --> 0:11:05.340 But at 67, I'm just wondering why. 0:11:06.090 --> 0:11:10.630 So I'd like you to answer that question for yourself, 0:11:10.890 --> 0:11:13.849 and if you come up with the reason that makes 0:11:13.849 --> 0:11:17.210 sense that you want to spend that kind of money 0:11:17.210 --> 0:11:22.450 one year before you retire, OK, if it were me, 0:11:22.570 --> 0:11:25.369 I would not be doing it, but more important than 0:11:25.369 --> 0:11:29.969 you buying the bag, I want you to understand why. 0:11:30.719 --> 0:11:34.080 Why at this point in your life do you want 0:11:34.080 --> 0:11:36.079 to do that? Next question, KT. 0:11:36.890 --> 0:11:41.479 OK, from Stacy. Hi, Suze. I saw where you mentioned 0:11:41.479 --> 0:11:44.780 that paying off your mortgage is the most important thing 0:11:45.000 --> 0:11:47.199 for retirement. I agree. 0:11:47.359 --> 0:11:48.289 One of them, yes. 0:11:48.400 --> 0:11:52.030 OK, so here is my dilemma. I am 63 years old. 0:11:52.239 --> 0:11:56.079 I owe $130,000 on my condo. 0:11:56.489 --> 0:12:03.250 I make $110,000 per year and I have $300,000 in 0:12:03.250 --> 0:12:09.169 my 401k. I only have $15,000 in saving because I 0:12:09.169 --> 0:12:12.799 just put a big down payment on a car. I 0:12:12.799 --> 0:12:17.049 also have about $60,000 in gold and silver that I 0:12:17.049 --> 0:12:20.330 can sell. I am still working and don't plan to 0:12:20.330 --> 0:12:22.369 retire anytime soon. 0:12:22.940 --> 0:12:27.219 Any advice as to how to pay off my mortgage? 0:12:27.539 --> 0:12:32.619 Yes, stop spending money you don't have simply to impress 0:12:32.619 --> 0:12:35.580 people you don't even know or like, because anybody who 0:12:35.580 --> 0:12:37.380 buys a big car and they have to put a 0:12:37.380 --> 0:12:39.900 down payment on it, that's exactly why they're doing it. 0:12:40.179 --> 0:12:44.059 But that's besides the point. Here's my concern for you. 0:12:45.450 --> 0:12:49.010 You say that you want to own your home outright, 0:12:49.049 --> 0:12:51.770 all right, by the time you retire, even though you 0:12:51.770 --> 0:12:56.319 don't plan to retire any time soon. Number one, you 0:12:56.320 --> 0:12:58.330 want to make God laugh. Have you ever heard this? 0:12:58.650 --> 0:13:01.609 Show her your plan. You don't know. Are you in 0:13:01.609 --> 0:13:04.929 a car accident? Are you sick? What happens? Does your 0:13:04.929 --> 0:13:10.909 company close? You don't know how long you have to work. 0:13:11.010 --> 0:13:13.299 You don't know that. That's an unknown. 0:13:13.780 --> 0:13:16.598 So I always tell you invest in the known versus 0:13:16.599 --> 0:13:20.979 the unknown. The known is most likely you're still going 0:13:20.979 --> 0:13:23.780 to need a home to live in, whether you are 0:13:23.780 --> 0:13:28.319 working or not. The known is your biggest monthly expense 0:13:28.539 --> 0:13:34.020 is your mortgage payment. Therefore, if you know that you 0:13:34.020 --> 0:13:35.739 want to stay in that house for the rest of 0:13:35.739 --> 0:13:40.059 your life, then that should have been a long time now. 0:13:40.530 --> 0:13:43.099 That should have been for a long time your number 0:13:43.099 --> 0:13:45.979 one priority to have it paid off by the time 0:13:45.979 --> 0:13:50.380 you retire. But no, you decided to take money even 0:13:50.380 --> 0:13:55.289 though all you have is $15,000 in an emergency fund. Really? 0:13:55.320 --> 0:14:00.299 All right. You decided to take emergency fund money from 0:14:00.299 --> 0:14:04.900 savings to put a large down payment on a car. Why? 0:14:05.299 --> 0:14:10.159 So your monthly payments could be smaller. Are you kidding me? 0:14:10.559 --> 0:14:18.099 And, you have $60,000 in gold and silver. Do what 0:14:18.400 --> 0:14:22.590 it already has gone up. Here's the bottom line. If 0:14:22.590 --> 0:14:25.400 it were me, this is what I would do. I 0:14:25.400 --> 0:14:29.059 would sell the gold and the silver, all of it. 0:14:29.559 --> 0:14:31.840 Maybe you have a capital gain. Maybe you don't. I 0:14:31.840 --> 0:14:34.599 don't know. You'll have to check that out before you 0:14:34.599 --> 0:14:37.840 sell it. If you could take that money and put 0:14:37.840 --> 0:14:39.840 it into your mortgage. 0:14:40.349 --> 0:14:44.309 That you currently have towards principal, make sure it goes 0:14:44.309 --> 0:14:49.669 towards principal. Now all you owe is $70,000 and if 0:14:49.669 --> 0:14:53.429 you continue to pay your monthly mortgage like you do 0:14:53.429 --> 0:14:58.429 right now or do it on a biweekly schedule where 0:14:58.429 --> 0:15:00.789 you actually do it every two weeks, which means you 0:15:00.789 --> 0:15:02.989 make one extra payment a year. 0:15:03.940 --> 0:15:07.859 You will have that mortgage paid off sooner than you 0:15:07.859 --> 0:15:13.539 have any idea. That is number one. Number two, you 0:15:13.539 --> 0:15:16.179 make $110,000 a year. 0:15:16.780 --> 0:15:20.859 And you're 63 years of age and you only have 0:15:20.859 --> 0:15:26.340 now $15,000 in savings. You need to take a hard 0:15:26.340 --> 0:15:30.799 look at yourself and what are you spending your money 0:15:30.799 --> 0:15:35.179 on because you don't say you're married, you don't say 0:15:35.179 --> 0:15:38.489 that you have kids, you use the word I throughout 0:15:38.489 --> 0:15:39.919 this entire thing. 0:15:40.570 --> 0:15:45.650 You know, and so therefore, you also have $300,000 in 0:15:45.650 --> 0:15:49.750 a 401k. It's not even a Roth 401k. 0:15:50.780 --> 0:15:54.739 So that means you don't have $300,000 in there because 0:15:54.739 --> 0:15:56.309 when you go to take it out you're going to 0:15:56.309 --> 0:16:00.409 owe ordinary income tax on it. So you have done 0:16:01.659 --> 0:16:05.309 everything wrong. You just have, and that is me standing 0:16:05.309 --> 0:16:09.070 in your truth for you because you wrote in and 0:16:09.070 --> 0:16:11.830 you didn't write in to get me to tell you 0:16:11.830 --> 0:16:15.309 what you could do. You already knew you need to 0:16:15.309 --> 0:16:16.489 stand in your truth. 0:16:17.280 --> 0:16:20.250 And you need to make you and your life and 0:16:20.250 --> 0:16:25.109 your money in savings and investment your number one priority 0:16:26.039 --> 0:16:27.750 over flashy things. 0:16:28.820 --> 0:16:32.739 Such as a car. All right, KT, next. 0:16:33.299 --> 0:16:38.140 OK, this is from Maria, a simple one liner which 0:16:38.140 --> 0:16:43.299 I love everybody. Maria asks Suze, does a living revocable 0:16:43.299 --> 0:16:47.010 trust need to be registered at the county you live in? 0:16:47.340 --> 0:16:51.140 No, it does not, never has and never will. Now 0:16:51.140 --> 0:16:53.659 maybe there's some places that do, but not that I 0:16:53.659 --> 0:16:55.299 know of. All right, go on next. 0:16:55.780 --> 0:16:59.289 So, from Diane. I don't have a trust because I 0:16:59.289 --> 0:17:03.690 don't have any executor for my estate. I have no 0:17:03.690 --> 0:17:07.670 family members, and most of my friends are older or gone. 0:17:07.969 --> 0:17:10.770 I tried to hire an attorney, and she did not 0:17:10.770 --> 0:17:15.010 want to be the executor. I'm leaving my entire estate 0:17:15.010 --> 0:17:19.209 to charity, and I'm 76 years old. I don't know 0:17:19.209 --> 0:17:23.369 what to do, and I'm very concerned. So, Suze, how 0:17:23.369 --> 0:17:26.889 will the documents work if I don't have any one 0:17:27.489 --> 0:17:29.729 to distribute my assets. 0:17:30.560 --> 0:17:33.310 So I think, and she wrote, please enlighten me. So 0:17:33.310 --> 0:17:35.079 can you please enlighten her? 0:17:35.180 --> 0:17:38.390 I can. And here's the first thing I'm gonna tell you. 0:17:38.800 --> 0:17:40.959 You don't have a will. You don't have a trust 0:17:40.959 --> 0:17:43.599 because of this excuse that you don't have an executor. 0:17:43.920 --> 0:17:47.479 Guess what? You have one. If you die, and this 0:17:47.479 --> 0:17:50.959 is true for everybody, if you die without a will, 0:17:51.160 --> 0:17:55.959 without a trust, the state that you live in deems 0:17:55.959 --> 0:17:59.399 that you have died intestate succession. 0:18:00.030 --> 0:18:05.109 And your assets will pass according to the succession rules 0:18:05.109 --> 0:18:09.130 of the state that you live in plus probate fees, OK? 0:18:09.510 --> 0:18:12.390 So let's just say your mother was still alive and 0:18:12.390 --> 0:18:14.900 you had kids, all right, maybe half would go to 0:18:14.900 --> 0:18:15.829 your mother or 0:18:15.979 --> 0:18:18.430 father, half would go to your kids. If you don't 0:18:18.430 --> 0:18:21.189 have any relatives or anybody, maybe they're going to look 0:18:21.189 --> 0:18:26.109 for cousins, uncles, aunts, but you already have one, whether 0:18:26.109 --> 0:18:29.000 you know it or not. You want to take power 0:18:29.000 --> 0:18:31.969 over your money. There's a few things you can do, 0:18:32.550 --> 0:18:36.709 depending on where your assets are. I'm assuming you have 0:18:36.709 --> 0:18:39.550 bank accounts, maybe you have a brokerage account, maybe you 0:18:39.550 --> 0:18:40.810 have a retirement account. 0:18:41.689 --> 0:18:46.379 You could designate right here and right now upon your 0:18:46.380 --> 0:18:50.729 death what's known as a pay on death account. You die, 0:18:51.060 --> 0:18:55.359 name the charities now that you want to get your money. 0:18:56.030 --> 0:18:58.109 You own a home. You could do a transfer on 0:18:58.109 --> 0:19:00.589 death account if you want. Who is to get your 0:19:00.589 --> 0:19:03.270 home if you have one? If that's to go to 0:19:03.270 --> 0:19:08.189 a charity, then do that. But you name it now 0:19:08.189 --> 0:19:12.069 while you still can, and that's the easiest way to 0:19:12.069 --> 0:19:15.879 take care of it. But I'm actually not that concerned 0:19:16.229 --> 0:19:18.989 about where your money goes when you have died. 0:19:19.709 --> 0:19:24.250 I'm concerned about what happens if something happens to you 0:19:24.420 --> 0:19:28.050 and how do we use your money to pay your bills, 0:19:28.180 --> 0:19:30.540 write your checks if you even write checks any more, 0:19:30.869 --> 0:19:34.420 to pay for a nursing home, to do all those things. Who, 0:19:34.550 --> 0:19:37.469 Diane is going to do that for you? All of 0:19:37.469 --> 0:19:41.589 a sudden you become incapacitated. You have a stroke. Anything 0:19:41.589 --> 0:19:42.599 can happen. 0:19:43.369 --> 0:19:47.849 So, you need to designate a durable power of attorney 0:19:47.849 --> 0:19:50.770 for health care, who can make health care decisions for you. 0:19:51.089 --> 0:19:56.250 So the must-have documents really can serve you well now. 0:19:57.209 --> 0:20:00.449 If you really don't have any friends, if you don't 0:20:00.449 --> 0:20:04.050 have anybody in your life, then you're in a situation 0:20:04.050 --> 0:20:08.890 where you need to hire a professional trustee, and there 0:20:08.890 --> 0:20:12.930 are firms that do that. Many banks will do that 0:20:12.930 --> 0:20:16.689 for you. Many brokerage firms may be will do that 0:20:16.689 --> 0:20:20.810 for you. You never know, but you will find somebody, 0:20:20.849 --> 0:20:24.188 but you need to get on it right now. But 0:20:24.770 --> 0:20:26.790 not taking action now. 0:20:27.800 --> 0:20:30.708 Just because you have an excuse of I don't have 0:20:30.709 --> 0:20:35.510 an executive for my estate just doesn't hold water with me. 0:20:35.900 --> 0:20:39.709 So tomorrow you are to make calls and you are 0:20:39.709 --> 0:20:43.270 to make pay on death accounts, find a trustee, and 0:20:43.270 --> 0:20:47.909 get yourself the must-have documents and do this now. Go 0:20:47.910 --> 0:20:50.260 to musthavedocs.com. Yes, KT. 0:20:51.060 --> 0:20:54.349 OK, this next one and my final question. 0:20:54.650 --> 0:20:59.410 It is fabulous, Suze. I love this. It's from Mary. 0:20:59.530 --> 0:21:03.510 She said, KT KT, KT, please, please, please pick me. 0:21:03.969 --> 0:21:08.400 And then she said, Help our beautiful 94 year old mom. 0:21:08.890 --> 0:21:14.729 Love this question. My 94-year-old mom has about $10,000 in 0:21:14.729 --> 0:21:18.010 credit card debt and has only been able to make 0:21:18.010 --> 0:21:22.889 the minimum payments. Suze, the account is not delinquent, but 0:21:22.890 --> 0:21:24.449 it's becoming a burden. 0:21:24.949 --> 0:21:28.300 She has no other debt. She does have a reverse 0:21:28.300 --> 0:21:33.140 mortgage and lives on Social Security and a teacher's pension. 0:21:33.660 --> 0:21:38.180 She has early memory loss from multiple mini strokes, but 0:21:38.180 --> 0:21:42.579 she's still remarkably independent. I moved in with her this 0:21:42.579 --> 0:21:47.180 year to help care for her, though she's amazingly physically 0:21:47.180 --> 0:21:49.369 capable for her age. 0:21:49.800 --> 0:21:54.260 The five of us kids help with expenses when needed, 0:21:54.520 --> 0:21:57.520 but we're at a point where we need to prioritize 0:21:57.520 --> 0:22:02.000 our own financial future. If she doesn't have this credit 0:22:02.000 --> 0:22:06.599 card debt, she could cover her monthly expenses. What do 0:22:06.599 --> 0:22:07.420 you recommend? 0:22:07.920 --> 0:22:10.699 So you know, I'm a little confused here because $10,000 0:22:10.699 --> 0:22:12.219 of credit card debt is nothing. 0:22:12.810 --> 0:22:15.968 I have a feeling that Mary meant to say she 0:22:15.969 --> 0:22:21.290 has about $100,000 in credit card debt and, and yes, 0:22:21.530 --> 0:22:25.729 because $10,000 in credit card debt, KT, the minimum payment 0:22:25.729 --> 0:22:28.410 due would be like $200 a month, $300 a month. 0:22:28.650 --> 0:22:31.540 It's a burden when it's $2,000 or $3,000 a month. 0:22:32.050 --> 0:22:34.530 All right, so Mary, I'm just going to make the 0:22:34.530 --> 0:22:38.530 assumption that when you wrote this, you wanted to put 0:22:38.530 --> 0:22:41.849 down $100,000 and instead you put down $10,000. 0:22:42.194 --> 0:22:47.395 If you really did mean $10,000 then something is radically 0:22:47.395 --> 0:22:50.395 wrong and the five kids should each come up with 0:22:50.395 --> 0:22:54.915 $2,000 each and pay off that debt. But I just 0:22:54.915 --> 0:22:59.675 can't believe that $10,000 of credit card debt is that 0:22:59.675 --> 0:23:02.025 big of a burden. So I'm going to go with 0:23:02.025 --> 0:23:06.675 my feelings, KT, and say it's $100,000. So you need 0:23:06.675 --> 0:23:10.974 to listen to me here, which is this first of all. 0:23:12.060 --> 0:23:17.060 You know, mama has already a reverse mortgage. She's been 0:23:17.060 --> 0:23:22.699 living far beyond her means for a long, long time. 0:23:23.020 --> 0:23:26.239 You say she has no other debt. Well, that's great. 0:23:26.420 --> 0:23:30.459 $100,000 of credit card debt, a reverse mortgage, lives on 0:23:30.459 --> 0:23:34.449 Social Security and a teacher's pension, and blah, blah blah blah. 0:23:34.739 --> 0:23:37.000 My real concern is here. 0:23:37.989 --> 0:23:41.469 She has memory loss and it could get bad and 0:23:41.469 --> 0:23:46.310 even though you moved in with her, that doesn't mean 0:23:46.310 --> 0:23:48.869 necessarily that you're going to be able to take care 0:23:48.869 --> 0:23:49.929 of her really. 0:23:50.800 --> 0:23:54.800 It just does because sometimes they wander, they'll leave the 0:23:54.800 --> 0:23:57.979 house in the middle of the night, all kinds of things, 0:23:58.160 --> 0:24:01.680 and you'll find that even though you love her, you 0:24:01.680 --> 0:24:04.880 moved in with her, you might not be able to 0:24:04.880 --> 0:24:09.030 let her stay there, all right, so you should number one, 0:24:09.040 --> 0:24:12.879 be looking at a memory care facility just in case 0:24:12.880 --> 0:24:16.659 you have to move her into one, all right. 0:24:17.199 --> 0:24:20.359 That's number one. If you do have to move her 0:24:20.359 --> 0:24:24.660 into one now, you may need to sell the house, 0:24:24.920 --> 0:24:28.619 but because she has a reverse mortgage on the home, 0:24:29.199 --> 0:24:32.479 I don't know how long she has had this home 0:24:32.479 --> 0:24:36.479 for on a reverse mortgage. There may be equity in 0:24:36.479 --> 0:24:39.800 her home, and there may not be very much equity 0:24:39.800 --> 0:24:40.739 in her home. 0:24:41.260 --> 0:24:44.139 So it just depends how long she has had a 0:24:44.140 --> 0:24:48.419 reverse mortgage, and given that she is 94, why do 0:24:48.420 --> 0:24:50.979 I think she's had one for at least 15 or 0:24:50.979 --> 0:24:52.439 20 years already. 0:24:53.239 --> 0:24:57.729 So we have a very, very serious situation here, Mary, 0:24:58.130 --> 0:25:02.449 and this is where the kids, all the kids, the 0:25:02.449 --> 0:25:06.699 five of you, need to get together and really look 0:25:06.699 --> 0:25:10.040 at what is the current equity in her home if 0:25:10.040 --> 0:25:14.000 the reverse mortgage was to be paid off. How much 0:25:14.000 --> 0:25:20.040 does a memory care facility really cost? And if, in fact, 0:25:20.199 --> 0:25:21.760 now listen to me closely. 0:25:22.780 --> 0:25:25.530 You've done that and they can't really attach a home 0:25:25.530 --> 0:25:28.659 or take anything away from her or whatever. You've sold 0:25:28.660 --> 0:25:32.698 the home. She has no assets. If she really has 0:25:32.699 --> 0:25:40.314 $100,000 of credit card debt after you have arranged everything 0:25:40.314 --> 0:25:42.899 for her and you know what's really going on. 0:25:44.140 --> 0:25:48.188