1 00:00:32,370 --> 00:00:39,410 Suze: December 18, 2022 welcome everybody to the Women and Money 2 00:00:39,409 --> 00:00:43,730 Suze: podcast as well as everyone smart enough to listen Suze 3 00:00:43,740 --> 00:00:48,120 Suze: O here and today is Suze School but I have 4 00:00:48,120 --> 00:00:50,440 Suze: to tell you, I'm a little bit nostalgic about this. 5 00:00:50,440 --> 00:00:56,410 Suze: Suze School. Wanna know why? Because today really is the 6 00:00:56,410 --> 00:01:01,290 Suze: last Suze School of 2022 7 00:01:01,710 --> 00:01:04,120 Suze: Now you might be saying, but Suze, we have one 8 00:01:04,120 --> 00:01:08,240 Suze: more Sunday left. No, we don't. 9 00:01:08,800 --> 00:01:16,260 Suze: Because next Sunday December 25, what happens? We have a very, 10 00:01:16,270 --> 00:01:21,160 Suze: very special guest now, I know that the majority of 11 00:01:21,160 --> 00:01:24,810 Suze: you that listen to the Women and Money podcast and 12 00:01:24,810 --> 00:01:32,020 Suze: everyone's smart enough to listen, loves this person. You love him. Oh, 13 00:01:32,030 --> 00:01:34,690 Suze: that's your first clue. 14 00:01:35,400 --> 00:01:39,630 Suze: Second clue is he is an extraordinary fisherman 15 00:01:40,530 --> 00:01:43,770 Suze: Now, who could that possibly be? 16 00:01:44,490 --> 00:01:49,140 Suze: Think about it. Oh better than just thinking about it. 17 00:01:49,270 --> 00:01:56,800 Suze: Make sure you tune in next Sunday, December 25th, which 18 00:01:56,800 --> 00:02:02,120 Suze: is also a clue to who this person may be. 19 00:02:02,280 --> 00:02:06,190 Suze: So this is it. So then I started to think 20 00:02:06,200 --> 00:02:11,250 Suze: we learned so many things this year, didn't we everybody 21 00:02:11,540 --> 00:02:14,850 Suze: And I was trying to think what were the main 22 00:02:14,850 --> 00:02:20,090 Suze: things that we really took away from all of these 23 00:02:20,100 --> 00:02:26,200 Suze: episodes over 100 episodes this year. And the first one 24 00:02:26,210 --> 00:02:29,980 Suze: had to be, I bonds. Don't you agree? I mean, 25 00:02:29,990 --> 00:02:34,730 Suze: I had to be I bond crazy most of this year. 26 00:02:34,990 --> 00:02:39,620 Suze: Especially just until November when everything changed again. But I 27 00:02:39,620 --> 00:02:42,450 Suze: was like, I bonds, I bonds, you gotta buy, I bonds, 28 00:02:42,450 --> 00:02:44,920 Suze: here's a way that you can buy more than $10,000. 29 00:02:44,930 --> 00:02:48,130 Suze: Here's this, here's that you got to do that. But 30 00:02:48,139 --> 00:02:51,070 Suze: I have to say I think we were pretty successful 31 00:02:51,070 --> 00:02:55,160 Suze: with that. It seems as if the majority of you 32 00:02:55,240 --> 00:03:01,549 Suze: absolutely bought I bonds except for everybody in my family 33 00:03:01,550 --> 00:03:04,419 Suze: except for Lynn and Tom. But that's another story. 34 00:03:05,380 --> 00:03:09,910 Suze: We also learned a lot about stocks 35 00:03:10,639 --> 00:03:14,760 Suze: and that stocks just don't go up. They can go 36 00:03:14,760 --> 00:03:19,359 Suze: down and they can go down very very quickly. 37 00:03:20,320 --> 00:03:23,000 Suze: And we learned how inflation 38 00:03:23,669 --> 00:03:28,340 Suze: really set the stage of what was going to happen 39 00:03:28,360 --> 00:03:31,400 Suze: in the year 2022. 40 00:03:32,340 --> 00:03:36,710 Suze: But we also learned that why we thought stocks might 41 00:03:36,720 --> 00:03:41,130 Suze: be volatile, that we could be safe in bond funds. 42 00:03:41,160 --> 00:03:44,970 Suze: We thought that didn't we? And all of you would 43 00:03:44,980 --> 00:03:48,340 Suze: write in and go. But Suze I'm in bond funds 44 00:03:48,340 --> 00:03:50,960 Suze: and you know over and over again. I would give 45 00:03:50,960 --> 00:03:55,780 Suze: a Suze School on why I hate bond funds and 46 00:03:55,790 --> 00:03:58,340 Suze: if you are in bond funds you should get out. 47 00:03:58,350 --> 00:04:01,020 Suze: Especially if they are long term 48 00:04:01,290 --> 00:04:03,390 Suze: Now... That's what I was saying at the beginning of 49 00:04:03,390 --> 00:04:05,540 Suze: this year and I've said it for a while now 50 00:04:06,060 --> 00:04:08,740 Suze: that doesn't mean if you are in bond funds now, 51 00:04:08,740 --> 00:04:11,430 Suze: you should get out because I actually think in the 52 00:04:11,430 --> 00:04:15,280 Suze: long run, you'll do pretty good in bond funds. We 53 00:04:15,280 --> 00:04:20,430 Suze: also learn did we not about T bills? My God, 54 00:04:20,890 --> 00:04:23,510 Suze: I went as crazy about T bills as I did 55 00:04:23,510 --> 00:04:27,360 Suze: I bonds and how you build a T bill ladder 56 00:04:27,370 --> 00:04:30,070 Suze: and notes and all of those things. So we learned 57 00:04:30,080 --> 00:04:35,109 Suze: about Treasury instruments, How you buy them where you buy 58 00:04:35,110 --> 00:04:37,770 Suze: them and why you buy them 59 00:04:38,310 --> 00:04:42,930 Suze: And how I really like short term right now, T 60 00:04:42,930 --> 00:04:46,570 Suze: bills three months, six months up to one year, maybe 61 00:04:46,570 --> 00:04:49,350 Suze: two years if you must. But I don't want you 62 00:04:49,350 --> 00:04:52,300 Suze: to buy 10 year and 20 year bonds and 30 63 00:04:52,300 --> 00:04:57,110 Suze: year bonds. And we learned that. We learned about how 64 00:04:57,110 --> 00:05:02,190 Suze: complicated inherited I. R. A. s or retirement accounts can be, 65 00:05:02,610 --> 00:05:06,570 Suze: especially if you've inherited from somebody 66 00:05:06,760 --> 00:05:10,880 Suze: who has already started required minimum distributions or were old 67 00:05:10,880 --> 00:05:15,130 Suze: enough to have started them even though they didn't take them. 68 00:05:15,830 --> 00:05:21,049 Suze: We learned about support and resistance levels and how you 69 00:05:21,050 --> 00:05:26,520 Suze: can use those indicators to really help you make decisions 70 00:05:26,529 --> 00:05:29,960 Suze: as to what you should and should not do. We 71 00:05:29,960 --> 00:05:33,870 Suze: learned about tax lost harvesting and especially to do that 72 00:05:33,880 --> 00:05:35,630 Suze: at the end of the year and you still have 73 00:05:35,630 --> 00:05:36,770 Suze: time to do that. 74 00:05:37,320 --> 00:05:41,500 Suze: Where you simply offset your losses this year against the 75 00:05:41,510 --> 00:05:45,980 Suze: gains that you've had in stocks. And then what happens 76 00:05:46,010 --> 00:05:50,480 Suze: you reset everything. We learned about the 30 day wash 77 00:05:50,480 --> 00:05:51,090 Suze: rule 78 00:05:51,880 --> 00:05:54,950 Suze: and how to be careful that if you take a 79 00:05:54,950 --> 00:05:57,500 Suze: loss if you sell a stock and you're going to 80 00:05:57,500 --> 00:06:01,040 Suze: take a loss on your taxes that you cannot buy 81 00:06:01,040 --> 00:06:04,830 Suze: it back within 30 days either in a different account 82 00:06:04,839 --> 00:06:07,510 Suze: or even while however you want to figure it out 83 00:06:07,520 --> 00:06:10,950 Suze: 30 days before or 30 days after you can't have 84 00:06:10,950 --> 00:06:16,360 Suze: bought the same stock. We learned did we not about Bitcoin. 85 00:06:17,240 --> 00:06:22,290 Suze: And we learned that Bitcoin train kind of stopped dead 86 00:06:22,300 --> 00:06:25,790 Suze: in its track. It went all the way up into 87 00:06:25,790 --> 00:06:29,890 Suze: the 60,000s and now it's all the way back down 88 00:06:29,900 --> 00:06:35,179 Suze: around 17,000 or so. And I have absolutely no doubt 89 00:06:35,400 --> 00:06:38,700 Suze: that before you even know it it could very easily 90 00:06:38,700 --> 00:06:44,570 Suze: be at 13,500, which happens to be a support level 91 00:06:44,580 --> 00:06:45,350 Suze: for it. 92 00:06:45,610 --> 00:06:47,720 Suze: How long it will take to get there I don't 93 00:06:47,720 --> 00:06:51,460 Suze: know but it's more on a downtrend than anything. 94 00:06:52,470 --> 00:06:54,930 Suze: But the only good news about that 95 00:06:55,730 --> 00:06:58,620 Suze: you know is that we always said never invest money 96 00:06:58,620 --> 00:07:04,560 Suze: in cryptocurrencies that you cannot afford to lose. That I've 97 00:07:04,560 --> 00:07:09,560 Suze: said over and over and over again. 98 00:07:10,310 --> 00:07:13,030 Suze: So we learned about that 99 00:07:13,950 --> 00:07:15,020 Suze: And so 100 00:07:15,860 --> 00:07:19,910 Suze: what else is there really? Have we not almost learned 101 00:07:19,910 --> 00:07:23,530 Suze: about everything that you need to know when it comes 102 00:07:23,530 --> 00:07:27,840 Suze: to money? I doubt it. So there is one last 103 00:07:27,850 --> 00:07:32,660 Suze: Suze School for today that I want to talk about 104 00:07:32,670 --> 00:07:36,690 Suze: and this is one that really concerns a lot of 105 00:07:36,690 --> 00:07:37,270 Suze: you 106 00:07:37,840 --> 00:07:43,510 Suze: that are in 401(k)s maybe you want to retire. And 107 00:07:43,510 --> 00:07:46,460 Suze: should you roll your money over? What should you do? 108 00:07:46,470 --> 00:07:50,560 Suze: What's the difference between a rollover and a transfer because 109 00:07:50,560 --> 00:07:51,640 Suze: some of you 110 00:07:52,140 --> 00:07:56,750 Suze: in fact many of you even professionals have gotten it 111 00:07:56,750 --> 00:08:01,630 Suze: totally confused about rollovers. How many times can you do 112 00:08:01,630 --> 00:08:05,320 Suze: a rollover? How many times can you do an IRA transfer? 113 00:08:05,330 --> 00:08:07,250 Suze: So many of you think you can only do it 114 00:08:07,250 --> 00:08:11,400 Suze: one time a year? That is incorrect. So the last 115 00:08:11,400 --> 00:08:13,820 Suze: Suze school for the year 116 00:08:14,340 --> 00:08:18,870 Suze: is the mistake you will make. If you do not 117 00:08:18,870 --> 00:08:25,650 Suze: know the difference between an IRA transfer and an IRA rollover, 118 00:08:25,660 --> 00:08:30,090 Suze: get your little Suze notebooks out for one last time 119 00:08:30,240 --> 00:08:34,320 Suze: this year. All right, so let's just begin with what 120 00:08:34,330 --> 00:08:39,069 Suze: is a transfer. Let's just say you have an IRA 121 00:08:39,070 --> 00:08:40,250 Suze: at a brokerage firm 122 00:08:40,790 --> 00:08:44,230 Suze: and you want to change to another brokerage firm. Maybe 123 00:08:44,230 --> 00:08:48,140 Suze: you want to go from Vanguard to Fidelity or Fidelity 124 00:08:48,140 --> 00:08:51,570 Suze: to Schwab. It doesn't even matter. But you want to 125 00:08:51,570 --> 00:08:55,990 Suze: take your IRA wherever it happens to be and you 126 00:08:55,990 --> 00:08:57,640 Suze: want to transfer it 127 00:08:58,450 --> 00:09:01,240 Suze: to another brokerage firm 128 00:09:01,990 --> 00:09:06,700 Suze: That's simply known as a transfer. You open up a 129 00:09:06,700 --> 00:09:10,570 Suze: new IRA at Fidelity or wherever you're going to do it. 130 00:09:10,600 --> 00:09:17,079 Suze: They contact Vanguard. And then everything just transfers from, let's 131 00:09:17,080 --> 00:09:21,670 Suze: say your Vanguard account to your Fidelity account. 132 00:09:22,350 --> 00:09:25,410 Suze: Now when you do a transfer 133 00:09:26,200 --> 00:09:31,930 Suze: your funds get transferred, everything gets transferred in kind. You 134 00:09:31,929 --> 00:09:36,090 Suze: do not have to sell what's in your IRA, let's 135 00:09:36,090 --> 00:09:40,150 Suze: say at Vanguard. If you want to get it transferred 136 00:09:40,150 --> 00:09:44,890 Suze: to Fidelity. All of it has to go from one 137 00:09:44,890 --> 00:09:50,079 Suze: to the other without you ever touching a penny of it. 138 00:09:50,920 --> 00:09:58,120 Suze: So listen closely because you can transfer your accounts as 139 00:09:58,120 --> 00:10:02,510 Suze: many times as you want. And as often as you want, 140 00:10:02,520 --> 00:10:07,830 Suze: you are not limited to doing a transfer just once 141 00:10:07,840 --> 00:10:11,860 Suze: a year. So let's just say you were bizarre 142 00:10:12,500 --> 00:10:15,790 Suze: and maybe it would be talking about myself, but anyway... 143 00:10:15,800 --> 00:10:19,490 Suze: and here you are and you want to transfer your 144 00:10:19,490 --> 00:10:24,190 Suze: IRA from Vanguard to Fidelity. Now two months later from 145 00:10:24,190 --> 00:10:27,609 Suze: Fidelity to Schwab and then two months later you want 146 00:10:27,610 --> 00:10:29,979 Suze: to go to E. Trade and then you want to 147 00:10:29,980 --> 00:10:34,250 Suze: go to another firm all within one year. You can 148 00:10:34,250 --> 00:10:37,870 Suze: do that as many times as you want. 149 00:10:39,140 --> 00:10:39,939 Suze: Next, 150 00:10:40,559 --> 00:10:45,579 Suze: a rollover. Now this is where maybe you have a 401(k) 151 00:10:46,990 --> 00:10:51,040 Suze: at your employer or a 403(b) or a TSP or 152 00:10:51,040 --> 00:10:52,190 Suze: whatever it may be. 153 00:10:52,900 --> 00:10:56,330 Suze: And now you have quit or you've retired or you 154 00:10:56,330 --> 00:11:00,810 Suze: were fired and it doesn't matter if you don't work 155 00:11:00,809 --> 00:11:06,599 Suze: there anymore. So whatever it is, you have money at 156 00:11:06,600 --> 00:11:11,110 Suze: an ex employers or current employers and now you want 157 00:11:11,110 --> 00:11:13,580 Suze: to take that 401(k)... 158 00:11:14,820 --> 00:11:17,319 Suze: you want to take it and you want to put 159 00:11:17,320 --> 00:11:21,000 Suze: it in an individual retirement account. 160 00:11:22,120 --> 00:11:28,510 Suze: This is called a direct rollover. Write it down. 161 00:11:29,190 --> 00:11:34,880 Suze: A direct rollover is where you open up an IRA 162 00:11:34,890 --> 00:11:36,320 Suze: rollover account 163 00:11:37,050 --> 00:11:40,420 Suze: at a firm wherever you want to do it. And 164 00:11:40,420 --> 00:11:43,690 Suze: again they contact your ex employer 165 00:11:44,740 --> 00:11:49,510 Suze: and your funds go directly from your ex employer or 166 00:11:49,510 --> 00:11:52,320 Suze: your current employer. Even though you just want to change 167 00:11:52,320 --> 00:11:57,390 Suze: it to your IRA, directly to them. 168 00:11:58,230 --> 00:12:01,800 Suze: It does not go to you and then to your IRA. 169 00:12:02,580 --> 00:12:08,710 Suze: It goes directly from a custodian to a custodian. A 170 00:12:08,710 --> 00:12:13,890 Suze: custodian being your old employer or your current employer 171 00:12:14,470 --> 00:12:19,439 Suze: to another custodian being the brokerage firm that you are 172 00:12:19,440 --> 00:12:23,260 Suze: going to roll the money over to or the credit 173 00:12:23,260 --> 00:12:27,500 Suze: union or the bank or wherever. For whatever reason you 174 00:12:27,510 --> 00:12:30,220 Suze: want those funds to be held. 175 00:12:31,070 --> 00:12:35,929 Suze: You never ever again want to do what we learned 176 00:12:35,950 --> 00:12:39,890 Suze: in some of the Suze Schools this year where you 177 00:12:39,890 --> 00:12:43,050 Suze: have money, you asked them to send you the money 178 00:12:43,050 --> 00:12:47,430 Suze: directly from your 401k, or 403(b), or TSP. 179 00:12:49,050 --> 00:12:53,590 Suze: And it comes directly to you and then you think 180 00:12:53,600 --> 00:12:59,170 Suze: you have 60 days to get it from you to 181 00:12:59,200 --> 00:13:03,370 Suze: the IRA. Now you do, that is true, but it will be 182 00:13:03,370 --> 00:13:07,790 Suze: a big mistake because your firm where the money is 183 00:13:07,790 --> 00:13:13,410 Suze: coming from will withhold 20% in withholding tax. 184 00:13:14,260 --> 00:13:17,220 Suze: And if you don't put the amount out of your 185 00:13:17,230 --> 00:13:22,369 Suze: own pocket that they withheld for tax into your new 186 00:13:22,370 --> 00:13:23,950 Suze: IRA rollover, 187 00:13:24,490 --> 00:13:28,740 Suze: you are going to owe ordinary income tax on the 188 00:13:28,740 --> 00:13:32,980 Suze: amount they withheld plus a 10% penalty if you are 189 00:13:32,980 --> 00:13:36,359 Suze: not 55 years of age or older when you left 190 00:13:36,360 --> 00:13:40,270 Suze: service from that employer. Got it? 191 00:13:40,870 --> 00:13:46,090 Suze: So you want to do a direct role over. Again, 192 00:13:46,100 --> 00:13:49,860 Suze: an indirect rollover is what I just said to you, 193 00:13:49,870 --> 00:13:53,069 Suze: is when you get a check from your ex employer 194 00:13:53,080 --> 00:13:56,150 Suze: and you have 60 days to get it into that account. 195 00:13:56,160 --> 00:14:00,340 Suze: Now with an indirect rollover, 196 00:14:01,200 --> 00:14:06,570 Suze: you can only do one in a 12 month period 197 00:14:06,580 --> 00:14:13,620 Suze: of time. Please underline 12 month period of time. So 198 00:14:13,620 --> 00:14:18,709 Suze: if you did an indirect rollover which means you had 199 00:14:18,710 --> 00:14:22,240 Suze: money at an employer, you want to now do an 200 00:14:22,340 --> 00:14:25,770 Suze: IRA with it and you have them send you that 201 00:14:25,770 --> 00:14:30,360 Suze: money and you get that money let's just say in December, 202 00:14:31,030 --> 00:14:35,530 Suze: and now you immediately turn around and what do you do? 203 00:14:35,540 --> 00:14:31,310 Suze: You put it into your IRA rollover and hopefully And 204 00:14:39,430 --> 00:14:43,400 Suze: added the 20% withholding tax out of your own pocket 205 00:14:43,410 --> 00:14:44,770 Suze: to that amount. 206 00:14:45,450 --> 00:14:52,020 Suze: You cannot do another indirect rollover for 12 months. So 207 00:14:52,020 --> 00:14:57,860 Suze: not until December of 2023. 208 00:14:58,740 --> 00:15:02,240 Suze: Many people think it's only once a year. No it's 209 00:15:02,240 --> 00:15:07,020 Suze: only once in a 12-month period of time. 210 00:15:07,790 --> 00:15:11,520 Suze: So the other thing is and you have to remember 211 00:15:11,520 --> 00:15:17,989 Suze: this when you have money in an IRA, if you want 212 00:15:18,000 --> 00:15:21,240 Suze: you can withdraw money from your own IRA. 213 00:15:22,880 --> 00:15:26,780 Suze: Maybe you need a short term fix for something, your 214 00:15:26,780 --> 00:15:29,730 Suze: car broke down or whatever and you have money in 215 00:15:29,730 --> 00:15:33,830 Suze: a traditional IRA and you want access to it 216 00:15:35,080 --> 00:15:38,020 Suze: but you want to put it back, you have 60 217 00:15:38,020 --> 00:15:40,900 Suze: days from the time that you withdrew funds from your 218 00:15:40,900 --> 00:15:41,920 Suze: traditional IRA, 219 00:15:43,770 --> 00:15:48,470 Suze: to put it back into the traditional IRA, or you 220 00:15:48,470 --> 00:15:51,930 Suze: will owe income taxes and a penalty on that if 221 00:15:51,930 --> 00:15:55,810 Suze: you are not 59 a half years of age or 222 00:15:55,820 --> 00:16:01,090 Suze: older that you can also only do once in every 223 00:16:01,100 --> 00:16:04,440 Suze: 12 month period of time. 224 00:16:05,170 --> 00:16:10,109 Suze: So why would one want to do a transfer versus 225 00:16:10,120 --> 00:16:11,310 Suze: a rollover? 226 00:16:12,060 --> 00:16:17,580 Suze: When you go from like to like it's a transfer. 227 00:16:18,180 --> 00:16:22,120 Suze: Alright so when you go from let's say an IRA to 228 00:16:22,120 --> 00:16:26,520 Suze: an IRA, that's known as a transfer. 229 00:16:27,480 --> 00:16:33,070 Suze: When you go from something like a 401(k) directly to an IRA, 230 00:16:34,100 --> 00:16:38,890 Suze: they are two different types of entities. One is a 401(k), 231 00:16:40,000 --> 00:16:44,740 Suze: one is an IRA. So you have to roll the money over. 232 00:16:44,740 --> 00:16:48,760 Suze: You can't just transfer it. It's called again. What everybody 233 00:16:48,760 --> 00:16:49,400 Suze: here's your quizzie. 234 00:16:50,340 --> 00:16:54,390 Suze: What is it called when the money goes directly from 235 00:16:54,510 --> 00:16:56,830 Suze: your 401(k) to an IRA? 236 00:16:58,600 --> 00:17:02,250 Suze: It's called a direct roll over. 237 00:17:02,930 --> 00:17:04,810 Suze: You need to know that. 238 00:17:05,780 --> 00:17:10,020 Suze: Now what happens again? And what is it called when 239 00:17:10,030 --> 00:17:13,740 Suze: you have a 401(k) or any retirement plan with an 240 00:17:13,740 --> 00:17:18,060 Suze: employer and they send you money and you put it 241 00:17:18,070 --> 00:17:22,979 Suze: in your IRA within 60 days. That again is called 242 00:17:22,990 --> 00:17:26,090 Suze: an indirect rollover. 243 00:17:27,000 --> 00:17:31,760 Suze: Got that everybody because that is your final lesson. 244 00:17:32,250 --> 00:17:36,210 Suze: So before we bring this last Suze School to and end, 245 00:17:36,859 --> 00:17:41,399 Suze: I just want to make a few brief comments on 246 00:17:41,410 --> 00:17:45,490 Suze: the housing market, paying off credit card debt with home 247 00:17:45,490 --> 00:17:50,540 Suze: equity lines of credit and 401(k) plans. And I'm sure 248 00:17:50,550 --> 00:17:52,879 Suze: I'll have something to say about T bills and the 249 00:17:52,880 --> 00:17:56,199 Suze: stock market as well. But here's what I really want 250 00:17:56,200 --> 00:17:58,619 Suze: you to know right now. 251 00:17:59,800 --> 00:18:07,210 Suze: Currently there are 250,000 people that are underwater 252 00:18:07,940 --> 00:18:11,790 Suze: in their homes. And what that means is they owe 253 00:18:11,790 --> 00:18:17,250 Suze: more on their mortgages than they could sell their house for. 254 00:18:17,640 --> 00:18:20,429 Suze: And you may be saying how is that possible? Real 255 00:18:20,430 --> 00:18:22,609 Suze: estate has gone up and it's so great and in 256 00:18:22,609 --> 00:18:26,410 Suze: fact it did. But there was such a rush to 257 00:18:26,410 --> 00:18:28,590 Suze: buy at the very end there 258 00:18:29,260 --> 00:18:34,080 Suze: with such incredibly also higher interest rates than there were 259 00:18:34,090 --> 00:18:35,340 Suze: a year ago. 260 00:18:36,340 --> 00:18:39,600 Suze: That people were just buying at any price and they 261 00:18:39,600 --> 00:18:43,750 Suze: were there and they were buying really at the top. 262 00:18:43,770 --> 00:18:47,520 Suze: And I do think that we have experienced the top 263 00:18:47,530 --> 00:18:52,430 Suze: of the real estate market in many areas. Not all 264 00:18:52,430 --> 00:18:57,550 Suze: but many, there are also one million home buyers that 265 00:18:57,550 --> 00:19:01,199 Suze: have only 10% equity in their homes. 266 00:19:01,700 --> 00:19:05,060 Suze: So when home sales start to slow and they are 267 00:19:05,060 --> 00:19:08,610 Suze: slowing so many of you are real estate agents and 268 00:19:08,609 --> 00:19:11,629 Suze: mortgage brokers and you're all writing me and you're saying 269 00:19:11,630 --> 00:19:16,409 Suze: to me Suze last year I made $160,000 and this 270 00:19:16,410 --> 00:19:19,609 Suze: year I'm barely going to make 100,000. 271 00:19:20,030 --> 00:19:22,630 Suze: So everybody can say that the housing market is going 272 00:19:22,630 --> 00:19:25,879 Suze: to be fine and don't worry about it. But real 273 00:19:25,880 --> 00:19:31,250 Suze: estate agents, mortgage brokers, they know that everything has slowed 274 00:19:31,260 --> 00:19:32,090 Suze: down 275 00:19:32,980 --> 00:19:35,710 Suze: and that there are many sellers that are actually taking 276 00:19:35,710 --> 00:19:38,830 Suze: their houses off the markets because they don't think they 277 00:19:38,830 --> 00:19:41,100 Suze: can get what they want from it. 278 00:19:41,740 --> 00:19:45,020 Suze: And then buyers have decided, you know what, I think 279 00:19:45,020 --> 00:19:47,340 Suze: I'm just gonna wait a little and see what happens 280 00:19:47,340 --> 00:19:49,949 Suze: with interest rates. Why not just keep my money in 281 00:19:49,950 --> 00:19:53,220 Suze: T bills making 4.7% interest or so. 282 00:19:54,410 --> 00:19:59,280 Suze: So be very very careful with housing. My advice is 283 00:19:59,280 --> 00:20:01,810 Suze: as follows, if you are living in a home that 284 00:20:01,810 --> 00:20:03,040 Suze: you want to sell 285 00:20:03,700 --> 00:20:07,540 Suze: and you are ready to move on sell it now. 286 00:20:07,730 --> 00:20:10,510 Suze: If you are thinking about buying a home 287 00:20:11,390 --> 00:20:15,540 Suze: and you can afford to wait, I would wait and 288 00:20:15,540 --> 00:20:20,620 Suze: see what happens with mortgage rates as well as the 289 00:20:20,619 --> 00:20:23,869 Suze: prices that you will have to pay. 290 00:20:24,750 --> 00:20:28,520 Suze: If you are out there and you have credit card 291 00:20:28,530 --> 00:20:32,469 Suze: debt and you are thinking about doing two things either 292 00:20:32,470 --> 00:20:36,790 Suze: taking a 401(k) loan to pay off your credit card 293 00:20:36,790 --> 00:20:40,910 Suze: debt or you have a lot of money in your 294 00:20:40,920 --> 00:20:43,010 Suze: equity in your home. There are a lot of people 295 00:20:43,010 --> 00:20:47,169 Suze: who have 70% equity now in their home. So you figure, 296 00:20:47,180 --> 00:20:51,000 Suze: I know I'll just take a loan for my home 297 00:20:51,000 --> 00:20:52,470 Suze: equity line of credit. 298 00:20:52,770 --> 00:20:55,960 Suze: It's lower than my interest rates on my credit cards. 299 00:20:55,970 --> 00:20:57,160 Suze: And 300 00:20:58,010 --> 00:21:00,760 Suze: what can I do I can write off those payments 301 00:21:00,770 --> 00:21:04,760 Suze: on my taxes in most cases 302 00:21:05,560 --> 00:21:08,170 Suze: Would I do that? If I were you I would 303 00:21:08,170 --> 00:21:11,030 Suze: not I would not I would not. Number one 304 00:21:11,720 --> 00:21:18,790 Suze: you never ever ever take an unsecured credit card and 305 00:21:18,800 --> 00:21:24,159 Suze: all credit cards are unsecured, in most cases. If you 306 00:21:24,160 --> 00:21:28,420 Suze: can't pay the credit card it's not like they can 307 00:21:28,420 --> 00:21:30,710 Suze: come and take your car away. 308 00:21:31,380 --> 00:21:34,720 Suze: Maybe yes they can sue you or garnish your wages 309 00:21:34,720 --> 00:21:39,169 Suze: or do whatever if they choose to maybe they will 310 00:21:39,180 --> 00:21:43,310 Suze: probably they won't. You never know, depends on your situation 311 00:21:43,320 --> 00:21:45,870 Suze: and if they think you have any money or not 312 00:21:46,910 --> 00:21:52,369 Suze: But you never take an unsecured credit card 313 00:21:53,180 --> 00:21:59,210 Suze: and replace it with a secured home equity line of credit. 314 00:21:59,730 --> 00:22:04,110 Suze: Because if for whatever reason you cannot pay that home 315 00:22:04,119 --> 00:22:08,210 Suze: Equity line of credit, they have the right to do what? 316 00:22:08,220 --> 00:22:13,220 Suze: Take your home from you. They can foreclose on it. 317 00:22:13,290 --> 00:22:15,920 Suze: So number one, you would never want to do it 318 00:22:15,930 --> 00:22:17,870 Suze: for that reason and 319 00:22:18,570 --> 00:22:23,040 Suze: interest rates on Home Equity lines of credit will absolutely 320 00:22:23,040 --> 00:22:25,300 Suze: in my opinion be going up. 321 00:22:26,109 --> 00:22:29,980 Suze: You also would never want to take a loan from 322 00:22:29,980 --> 00:22:31,990 Suze: your 401(k) plan 323 00:22:32,680 --> 00:22:37,970 Suze: to pay off credit card debt. And that is because 324 00:22:38,220 --> 00:22:42,010 Suze: if you take money from a 401(k) plan, 325 00:22:42,590 --> 00:22:46,730 Suze: that money now is no longer in there. And if 326 00:22:46,740 --> 00:22:51,320 Suze: these markets happen to skyrocket and they go straight up, 327 00:22:52,020 --> 00:22:55,820 Suze: you've seriously missed out on that. 328 00:22:56,550 --> 00:23:00,370 Suze: That's number one. But number two if for whatever reason 329 00:23:00,420 --> 00:23:04,300 Suze: you get sick, you lose your job, they fire you. 330 00:23:04,300 --> 00:23:05,580 Suze: Who knows what. 331 00:23:06,180 --> 00:23:09,060 Suze: If you don't have the money to pay back that 332 00:23:09,060 --> 00:23:12,920 Suze: you owe, you will owe ordinary income tax on that 333 00:23:12,920 --> 00:23:17,260 Suze: money plus a 10% penalty if you're not 55 years 334 00:23:17,260 --> 00:23:21,310 Suze: of age or older in the year that you left service. 335 00:23:21,790 --> 00:23:23,070 Suze: Got that everybody? 336 00:23:23,680 --> 00:23:24,630 Suze: So 337 00:23:25,619 --> 00:23:30,439 Suze: that's another lesson that we should really take to the bank. 338 00:23:30,619 --> 00:23:31,989 Suze: Overall 339 00:23:32,640 --> 00:23:37,800 Suze: I still like short term treasury bills as a place 340 00:23:37,800 --> 00:23:39,389 Suze: to keep safe money. 341 00:23:39,810 --> 00:23:42,830 Suze: Many of you have written and said Suze, should I 342 00:23:42,830 --> 00:23:45,459 Suze: take all my money out of the stock market and 343 00:23:45,460 --> 00:23:48,919 Suze: put it into bill's? Not if you are young you 344 00:23:48,920 --> 00:23:53,010 Suze: have time on your side, you have 30, 40, even 345 00:23:53,020 --> 00:23:56,689 Suze: 20 years until you need this money. You continue to 346 00:23:56,690 --> 00:24:01,820 Suze: dollar cost average into these markets. Make sure you're diversified 347 00:24:01,859 --> 00:24:04,440 Suze: good quality, everything that you're buying 348 00:24:04,580 --> 00:24:09,000 Suze: again. I would want to see you in dividend paying 349 00:24:09,000 --> 00:24:14,710 Suze: stocks and ETFs. I do not have a problem with 350 00:24:14,720 --> 00:24:19,620 Suze: short term bond funds. Although I still think you are 351 00:24:19,619 --> 00:24:23,690 Suze: better off or even intermediate bond funds. I still think 352 00:24:23,690 --> 00:24:29,700 Suze: you are better off buying individual treasuries than a bond fund, 353 00:24:29,710 --> 00:24:31,340 Suze: if you can. 354 00:24:32,090 --> 00:24:33,770 Suze: I think that brings us to the end of the 355 00:24:33,770 --> 00:24:38,170 Suze: last Suze School for 2022. 356 00:24:39,170 --> 00:24:44,560 Suze: So I can say that with all my heart, right, 357 00:24:44,570 --> 00:24:49,840 Suze: I really enjoyed being your financial professor and I hope 358 00:24:49,840 --> 00:24:54,500 Suze: we get to continue next year where all of you 359 00:24:54,500 --> 00:24:58,960 Suze: will feel that you now have graduated to the next 360 00:24:58,970 --> 00:25:04,660 Suze: level because just maybe just maybe the lessons may get 361 00:25:04,670 --> 00:25:07,630 Suze: a little bit more sophisticated. 362 00:25:08,550 --> 00:25:11,840 Suze: So until next time there's really only one thing that 363 00:25:11,840 --> 00:25:13,720 Suze: I want you to remember when it comes to you 364 00:25:13,720 --> 00:25:16,409 Suze: and your money and it is this for you to 365 00:25:16,410 --> 00:25:21,810 Suze: be smart, strong and secure. Oh, there is one other 366 00:25:21,810 --> 00:25:24,460 Suze: thing I want you to remember to watch the World 367 00:25:24,460 --> 00:25:28,700 Suze: Cup today. It's ending today. I'm gonna be so sad. 368 00:25:28,700 --> 00:25:30,990 Suze: I've loved it so much. I can't even stand it. 369 00:25:31,000 --> 00:25:34,700 Suze: Are you gonna root for Argentina? You're gonna root for France? 370 00:25:35,350 --> 00:25:40,770 Suze: I got news whoever wins. I'll be so happy for them. Okay, 371 00:25:40,780 --> 00:25:46,179 Suze: we will see you soon with another Ask KT and 372 00:25:46,180 --> 00:25:52,150 Suze: Suze Anything coming up on Thursday. Now you stay safe. 373 00:25:52,160 --> 00:25:53,330 Suze: Bye bye. Everybody