1 00:00:34,509 --> 00:00:39,119 KT: Good morning. Everybody. Welcome to the Ask K T and 2 00:00:39,130 --> 00:00:44,909 KT: Suze Anything Women and Money podcast. Today is March 23rd, 3 00:00:45,310 --> 00:00:48,769 KT: 2023 it's the third month. So we have a 3 4 00:00:48,779 --> 00:00:50,330 KT: 23 23 5 00:00:50,549 --> 00:00:52,369 KT: and I'm looking at Suze and I don't think she's 6 00:00:52,380 --> 00:00:55,310 KT: awake yet. So I'm not supposed to be doing all 7 00:00:55,319 --> 00:00:59,599 KT: this until she's, she's like kind of totally awake. I said, Suze, 8 00:00:59,610 --> 00:01:01,900 KT: everyone missed me so much. Let me just get in 9 00:01:01,909 --> 00:01:03,569 KT: there and say hi to them. 10 00:01:03,580 --> 00:01:05,449 Suze: KT, It was only one week that you weren't on. 11 00:01:05,459 --> 00:01:08,199 KT: Did you miss me? Did you did everyone miss me. 12 00:01:09,139 --> 00:01:10,279 KT: Let them wright in. 13 00:01:10,970 --> 00:01:12,559 Suze: Trust me. I don't have 14 00:01:12,669 --> 00:01:15,690 Suze: to ask them. I know that they did, but you 15 00:01:15,699 --> 00:01:19,900 Suze: know who KT missed and has been missing the past week? 16 00:01:21,349 --> 00:01:26,160 KT: Suze is so busy. She's figuring out bank failures. She's figuring 17 00:01:26,169 --> 00:01:31,440 KT: out what people should do right now. She is so busy. 18 00:01:31,519 --> 00:01:33,669 KT: We don't see each other, we see each other for 19 00:01:33,680 --> 00:01:34,699 KT: a cup of coffee 20 00:01:35,099 --> 00:01:37,809 KT: in the morning, which we just had to start this. 21 00:01:37,819 --> 00:01:40,699 KT: Then we see each other at night and at night 22 00:01:40,709 --> 00:01:43,050 KT: I'm so tired. I just fall asleep.  23 00:01:43,239 --> 00:01:46,510 Suze: But it is what it is. But KT, you have 24 00:01:46,519 --> 00:01:47,470 Suze: to admit 25 00:01:47,900 --> 00:01:53,029 Suze: that it's been really a crazy week or so... roller 26 00:01:53,040 --> 00:01:57,830 Suze: coaster and with everybody really being worried about their money, 27 00:01:57,839 --> 00:02:01,139 Suze: the safety of their money, what should they do? What 28 00:02:01,150 --> 00:02:04,629 Suze: should they not do? And I think it's really important 29 00:02:04,639 --> 00:02:06,970 Suze: that we're doing everything that we're doing. 30 00:02:07,080 --> 00:02:09,339 KT: I mean, have you all seen her on TV? She's 31 00:02:09,350 --> 00:02:11,449 KT: been on TV for the past week. 32 00:02:11,550 --> 00:02:13,850 Suze: Yes. But the last thing I did, she said, oh, 33 00:02:13,860 --> 00:02:16,139 Suze: you don't look so good. You looked a little blotchy, 34 00:02:16,149 --> 00:02:17,000 Suze: didn't you tell me? 35 00:02:17,008 --> 00:02:19,389 KT: I did tell you that and she told me it 36 00:02:19,399 --> 00:02:24,199 KT: was my TV screen. That's what she told me so. 37 00:02:24,210 --> 00:02:25,600 Suze: Well, I don't want to think I'm the one who's 38 00:02:25,610 --> 00:02:31,350 Suze: blotchy with the lighting or something. Anyway, we're going to 39 00:02:31,360 --> 00:02:34,350 Suze: do a normal Ask KT and 40 00:02:35,199 --> 00:02:39,329 Suze: Suze Anything, meaning it's not gonna be about the FDIC. 41 00:02:39,339 --> 00:02:42,089 Suze: It's not gonna be about SPIC, it's not gonna be 42 00:02:42,100 --> 00:02:45,729 Suze: about all of these things. It's going to just be 43 00:02:45,740 --> 00:02:49,100 Suze: about questions that all of you need to know the 44 00:02:49,110 --> 00:02:54,960 Suze: answers to. So KT let's get ready ready. All right, 45 00:02:54,970 --> 00:02:55,850 Suze: let's do it. 46 00:02:59,089 --> 00:03:03,350 KT: First question Suze, is from Lauren. Good morning, Suze and KT, I have a question regarding defaulted 47 00:03:03,360 --> 00:03:04,940 KT: student loan debt. 48 00:03:06,470 --> 00:03:10,880 KT: My significant other defaulted on his loans greater than five 49 00:03:10,889 --> 00:03:16,720 KT: years ago. He has about $100,000 to pay. What is 50 00:03:16,729 --> 00:03:19,509 KT: the best way to pay the loans back? Is it 51 00:03:19,520 --> 00:03:22,740 KT: best to hire a lawyer or pay the third company 52 00:03:22,750 --> 00:03:27,160 KT: debt agency directly? Love your advice and always look forward 53 00:03:27,169 --> 00:03:28,750 KT: to listening. Lauren. 54 00:03:31,449 --> 00:03:34,740 Suze: The advice I really hope to give you is that I hope the significant other isn't somebody that you're legally 55 00:03:34,750 --> 00:03:39,770 Suze: attached to like your spouse. Because when you see somebody 56 00:03:39,779 --> 00:03:42,139 Suze: has defaulted on a student loan 57 00:03:42,710 --> 00:03:45,759 Suze: and now you're the one writing me to ask me, 58 00:03:45,770 --> 00:03:50,529 Suze: how do I fix it for this person? It just 59 00:03:50,539 --> 00:03:55,240 Suze: concerns me, Lauren, but that's all I'm gonna say about that. 60 00:03:55,429 --> 00:03:58,300 Suze: Here's what I would do if I were you, I 61 00:03:58,309 --> 00:04:01,059 Suze: would not hire a lawyer because a lawyer can't do 62 00:04:01,070 --> 00:04:03,660 Suze: anything for this situation. 63 00:04:04,110 --> 00:04:08,529 Suze: A third company debt agency directly cannot do anything for 64 00:04:08,539 --> 00:04:12,649 Suze: this situation. The only person that can do something for 65 00:04:12,660 --> 00:04:18,450 Suze: this situation is your significant other period. They need to 66 00:04:18,459 --> 00:04:21,678 Suze: get it out of default. So therefore, and for those 67 00:04:21,690 --> 00:04:24,670 Suze: of you who don't know what default is default means, 68 00:04:24,678 --> 00:04:27,859 Suze: you have just stopped paying on it and the student 69 00:04:27,869 --> 00:04:30,250 Suze: loan company is loving you 70 00:04:30,678 --> 00:04:34,890 Suze: and they're loving you because when it is in default, 71 00:04:34,910 --> 00:04:40,169 Suze: the interest rates still accrue and maybe you owed $30,000 72 00:04:40,178 --> 00:04:43,299 Suze: to begin with. And then it goes to 50,000. And 73 00:04:43,309 --> 00:04:48,109 Suze: now as Lauren just said, it's at $100,000 74 00:04:48,540 --> 00:04:52,130 Suze: and given in most cases currently, you cannot just charge 75 00:04:52,140 --> 00:04:55,618 Suze: this in bankruptcy. Oh, they'll just let it go from 76 00:04:55,649 --> 00:05:00,290 Suze: 100,000 to 150,000 and so forth. And then one day 77 00:05:00,299 --> 00:05:03,709 Suze: they come knocking at your door, they even have the rights, 78 00:05:03,720 --> 00:05:04,130 Suze: not only 79 00:05:04,214 --> 00:05:08,545 Suze: to garnish your wages, but to garnish your social security check. 80 00:05:08,553 --> 00:05:12,505 Suze: So this kind of debt currently follows you all the 81 00:05:12,515 --> 00:05:16,024 Suze: way into old age. And in most cases, there is 82 00:05:16,035 --> 00:05:21,464 Suze: absolutely nothing that you can do about it. Therefore, this person, 83 00:05:21,695 --> 00:05:23,725 Suze: he is to contact, 84 00:05:23,988 --> 00:05:27,779 Suze: right, the student loan company and find out what does 85 00:05:27,790 --> 00:05:31,709 Suze: it take to get this loan out of default. Chances 86 00:05:31,720 --> 00:05:35,118 Suze: are he will go on a pay as you go method. 87 00:05:35,709 --> 00:05:40,690 Suze: Where a certain percentage of his income currently, it's only 88 00:05:40,700 --> 00:05:45,760 Suze: about five or 10% goes towards this debt, but it 89 00:05:45,769 --> 00:05:49,238 Suze: has ruined his credit. That means if you were to 90 00:05:49,250 --> 00:05:52,579 Suze: marry him and you were to ever apply for a 91 00:05:52,589 --> 00:05:56,440 Suze: mortgage or something in both your names. I'm sure his 92 00:05:56,450 --> 00:05:59,640 Suze: FICO score is down the drain that would affect everything 93 00:05:59,649 --> 00:06:00,600 Suze: that you do. 94 00:06:00,980 --> 00:06:04,940 Suze: So what you need to do is get him to call, 95 00:06:04,950 --> 00:06:09,570 Suze: not you but him, to get on this and call 96 00:06:09,579 --> 00:06:12,570 Suze: the student loan company that he owes this debt to 97 00:06:12,678 --> 00:06:16,079 Suze: and find out what does he have to do to 98 00:06:16,089 --> 00:06:19,450 Suze: get it out of default. You are not to save 99 00:06:19,459 --> 00:06:23,570 Suze: him in this situation. Do you hear me, girlfriend? KT 100 00:06:23,839 --> 00:06:28,359 Suze: next question? OK. Wait, wait, wait, wait, wait, wait. 101 00:06:28,613 --> 00:06:33,595 Suze: So I realized we started the podcast but I didn't 102 00:06:33,605 --> 00:06:35,894 Suze: make a really important announcement. 103 00:06:36,255 --> 00:06:40,135 KT: I know what it is. Next week, a week from today. 104 00:06:40,464 --> 00:06:41,885 Suze: Do you want to tell everybody? 105 00:06:42,005 --> 00:06:48,125 KT: Suze's doing an unbelievable webinar called Prepare For the Financial 106 00:06:48,135 --> 00:06:49,524 KT: Climate Change. 107 00:06:50,738 --> 00:06:52,760 Suze: Do you like that? Do you like that title? 108 00:06:52,880 --> 00:06:54,169 KT: Yes. Yes. 109 00:06:54,178 --> 00:06:56,890 Suze: Do you want me to tell everybody what you're doing? 110 00:06:56,910 --> 00:07:01,299 Suze: So I am, it's free, everybody and to register, you 111 00:07:01,309 --> 00:07:05,250 Suze: would simply go to Suze S U Z E Suze 112 00:07:05,649 --> 00:07:11,589 Suze: Orman dot com slash webinar. It is a week from today, Thursday, 113 00:07:11,600 --> 00:07:16,959 Suze: March 30th. It will be live at three PM Pacific time, 114 00:07:16,970 --> 00:07:19,609 Suze: six PM, East coast time. 115 00:07:19,970 --> 00:07:21,820 Suze: Do you know how many people have already registered? And 116 00:07:21,829 --> 00:07:22,940 Suze: we just announced it? 117 00:07:22,950 --> 00:07:26,420 KT: I think it was like 18,000 or something right around. 118 00:07:27,059 --> 00:07:30,140 KT: It's great and we didn't even do any promotions yet. 119 00:07:30,149 --> 00:07:32,140 Suze: No, all the emails and everything. 120 00:07:32,149 --> 00:07:33,149 KT: Is there a limit? 121 00:07:33,470 --> 00:07:36,480 Suze: No, but we are expecting about 50,000. 122 00:07:36,549 --> 00:07:40,970 KT: Sign up everyone, free, free, free, free, free. She's gonna 123 00:07:40,980 --> 00:07:45,200 KT: really impart some pretty important advice to about climate change. 124 00:07:47,709 --> 00:07:51,170 Suze: KT, it's not, it's financial climate change. I'm not talking about 125 00:07:51,179 --> 00:07:53,040 Suze: the environment here, right? But 126 00:07:53,380 --> 00:08:01,059 Suze: every single podcast, I impart some really important information. So 127 00:08:01,070 --> 00:08:05,739 Suze: here's the thing. Everybody join us and have fun because 128 00:08:05,750 --> 00:08:08,839 Suze: you never know what will happen. All right, KT, next question. 129 00:08:11,589 --> 00:08:15,040 KT: Ok. Next question is from Robin. Suze and KT, I love your podcast. Both of you 130 00:08:15,049 --> 00:08:19,519 KT: and your Unstoppable theme song. So I'm learning so much 131 00:08:19,529 --> 00:08:23,140 KT: and I'm a federal retiree and fine with the Thrift 132 00:08:23,149 --> 00:08:27,420 KT: Savings plan, which is T S P and the Federal 133 00:08:27,429 --> 00:08:32,260 KT: Employees Group Life Insurance, which is F E G L I, 134 00:08:32,479 --> 00:08:38,088 KT: the standard order of precedence beneficiary assignments being a spouse, 135 00:08:38,098 --> 00:08:42,749 KT: then Children in equal shares. I understand this order of 136 00:08:42,758 --> 00:08:48,868 KT: precedence is followed when no beneficiary forms are on file. So, Suze, 137 00:08:48,879 --> 00:08:53,648 KT: what are the advantages and disadvantages to naming a revocable 138 00:08:53,658 --> 00:08:56,008 KT: living trust as beneficiary? 139 00:08:59,690 --> 00:09:04,280 Suze: So here's the bottom line girlfriend. There are tremendous disadvantages to you if you do not 140 00:09:04,289 --> 00:09:09,699 Suze: name a beneficiary because if you don't name a beneficiary 141 00:09:09,710 --> 00:09:13,380 Suze: on and everybody listen to this: a thrift savings plan 142 00:09:13,390 --> 00:09:17,699 Suze: or a 401k or a 403 B or whatever it 143 00:09:17,710 --> 00:09:21,840 Suze: may be or your Roth IRAs or your life insurance policies, 144 00:09:22,099 --> 00:09:27,409 Suze: those investments will have to go through probate. You never ever, 145 00:09:27,419 --> 00:09:31,900 Suze: ever want to go through probate. And when you have 146 00:09:31,909 --> 00:09:38,929 Suze: a designated beneficiary, it avoids probate. So if you don't 147 00:09:38,940 --> 00:09:42,429 Suze: have anybody, you don't have a spouse, you don't have children, 148 00:09:42,440 --> 00:09:44,690 Suze: you don't have anybody like that 149 00:09:45,210 --> 00:09:50,960 Suze: that's automatically designated, then yes, you absolutely should name your 150 00:09:50,969 --> 00:09:55,669 Suze: living revocable trust as your beneficiary and then whoever you 151 00:09:55,679 --> 00:09:59,729 Suze: have named in that trust to receive this money they 152 00:09:59,739 --> 00:10:02,640 Suze: will receive it without probate.  There you go.  Next question, KT. 153 00:10:04,979 --> 00:10:08,880 KT: Ok. This is from Mel. Hello to the Fabulous Suze and KT. 154 00:10:11,010 --> 00:10:16,099 KT: Speaking of interest, can you please explain how mortgage interest works? 155 00:10:16,349 --> 00:10:20,209 KT: If I have a low mortgage interest rate of 3% 156 00:10:20,400 --> 00:10:24,169 KT: and are only four years into a 30 year mortgage, 157 00:10:24,179 --> 00:10:28,710 KT: is it better to put an extra 10,000 yearly to 158 00:10:28,719 --> 00:10:35,409 KT: pay off the 400,000 loan or invest the 10,000 safely 159 00:10:35,419 --> 00:10:38,890 KT: with T bills or CDs at 5%? 160 00:10:39,080 --> 00:10:42,530 Suze: Oh, Mel this is an interesting one for me to 161 00:10:42,539 --> 00:10:47,429 Suze: answer because the financial institutions that you all get your 162 00:10:47,440 --> 00:10:48,809 Suze: mortgages from 163 00:10:49,580 --> 00:10:52,669 Suze: are kind of a little tricky if you ask me. 164 00:10:52,679 --> 00:10:54,549 Suze: And I say that because 165 00:10:55,510 --> 00:10:59,789 Suze: it's assumed that you most likely will be selling your 166 00:10:59,799 --> 00:11:04,479 Suze: home within seven years of purchasing it. And even though 167 00:11:04,489 --> 00:11:07,559 Suze: you got a 30 year mortgage 168 00:11:08,380 --> 00:11:10,989 Suze: And you would think that they would spread that interest 169 00:11:11,000 --> 00:11:16,299 Suze: equally over all 30 years, that's not how it works. 170 00:11:16,500 --> 00:11:22,819 Suze: It works where they load the interest up front so 171 00:11:22,830 --> 00:11:26,469 Suze: that if you happen to sell your home, they got 172 00:11:26,479 --> 00:11:30,049 Suze: paid far more interest than if they had done it 173 00:11:30,059 --> 00:11:31,830 Suze: any other way. 174 00:11:32,130 --> 00:11:34,590 Suze: So maybe I can make a little bit of sense 175 00:11:34,599 --> 00:11:38,940 Suze: here for you. You say that you have a $400,000 176 00:11:38,950 --> 00:11:39,780 Suze: mortgage 177 00:11:40,570 --> 00:11:47,419 Suze: 30 year mortgage and it's at 3% and you have 178 00:11:47,429 --> 00:11:51,520 Suze: only been paying on it for four years if you 179 00:11:51,530 --> 00:11:55,950 Suze: were to look at your amortization schedule. You would find 180 00:11:55,960 --> 00:12:02,840 Suze: out that your payments on that are probably about $1,686 181 00:12:02,849 --> 00:12:03,539 Suze: a month. 182 00:12:04,409 --> 00:12:11,440 Suze: However, in that first year, only $686 of that went 183 00:12:11,450 --> 00:12:18,500 Suze: to pay down your principal, $1,000 went for interest. Here 184 00:12:18,510 --> 00:12:21,020 Suze: you are four years later 185 00:12:21,559 --> 00:12:31,289 Suze: And now only about $771 is going towards principal. $914 186 00:12:31,299 --> 00:12:35,489 Suze: is still going towards interest. Now, 187 00:12:36,479 --> 00:12:43,250 Suze: if you were to put $10,000 a year, every year, 188 00:12:44,010 --> 00:12:47,218 Suze: at the beginning of the year into this mortgage, you 189 00:12:47,229 --> 00:12:52,080 Suze: would pay off this mortgage in about 15 or 16 190 00:12:52,090 --> 00:12:58,119 Suze: years versus, you still have another 26 years to go 191 00:12:58,130 --> 00:13:01,780 Suze: if you just keep paying the 1686 a month that 192 00:13:01,789 --> 00:13:03,299 Suze: you're paying right now. 193 00:13:04,250 --> 00:13:07,260 Suze: So that's something for you to think about because a 194 00:13:07,270 --> 00:13:13,659 Suze: ten-year difference is a tremendous difference. Now, you're asking me 195 00:13:13,669 --> 00:13:18,460 Suze: what would be better financially doing that or taking that 196 00:13:18,469 --> 00:13:21,039 Suze: $10,000 and investing it? 197 00:13:21,909 --> 00:13:25,729 Suze: Do you understand how it's impossible for me to answer 198 00:13:25,739 --> 00:13:26,710 Suze: that question? 199 00:13:27,409 --> 00:13:31,299 Suze: Because I would have to assume that what you invested 200 00:13:31,309 --> 00:13:38,959 Suze: that $10,000 a year in, gave you a return of 3%, 4%, 5% 201 00:13:38,969 --> 00:13:43,380 Suze: whatever it may be. But I can't make that assumption 202 00:13:43,450 --> 00:13:48,289 Suze: because I don't know, I don't know your investment skills. 203 00:13:48,299 --> 00:13:50,750 Suze: I don't know if these markets start to go crazy. 204 00:13:50,760 --> 00:13:53,349 Suze: Will you sell out? Will you get afraid? I don't 205 00:13:53,359 --> 00:13:54,659 Suze: know about that. 206 00:13:55,130 --> 00:13:57,909 Suze: But let me tell you what I do know something about. 207 00:13:58,510 --> 00:14:04,099 Suze: I know that nothing makes a woman in particular feel 208 00:14:04,109 --> 00:14:09,080 Suze: more secure than owning her own home outright. 209 00:14:10,679 --> 00:14:13,289 Suze: And what have I told you year in year out 210 00:14:13,299 --> 00:14:16,479 Suze: is the goal of money. The goal of money is 211 00:14:16,489 --> 00:14:20,359 Suze: to make you feel secure. So, here's the question back 212 00:14:20,369 --> 00:14:24,450 Suze: to you. How would you feel knowing 213 00:14:25,080 --> 00:14:28,960 Suze: that in another 15 years or so you would own 214 00:14:28,969 --> 00:14:34,010 Suze: that home outright? How would that make you feel? Not 215 00:14:34,020 --> 00:14:37,090 Suze: how much money would you have if you invested $10,000 216 00:14:37,099 --> 00:14:37,690 Suze: a year? 217 00:14:38,530 --> 00:14:43,239 Suze: But how would owning your own home outright in 15 218 00:14:43,250 --> 00:14:46,250 Suze: years make you feel? Now what you didn't do is 219 00:14:46,260 --> 00:14:49,429 Suze: you didn't tell us in the email, how old you are. 220 00:14:49,890 --> 00:14:52,289 Suze: How many years you're gonna continue to work? Are you 221 00:14:52,299 --> 00:14:55,539 Suze: gonna keep this home forever? Are you not? So there's 222 00:14:55,549 --> 00:14:59,479 Suze: so many things that go into this answer that I 223 00:14:59,489 --> 00:15:04,200 Suze: can't answer because I don't have enough facts about you. However, 224 00:15:05,150 --> 00:15:10,320 Suze: I can say this, think about what just happened with 225 00:15:10,330 --> 00:15:14,200 Suze: S V B, Silicon Valley Bank. And could it go 226 00:15:14,210 --> 00:15:17,359 Suze: on and what happens in the markets? Are you sure 227 00:15:17,369 --> 00:15:20,799 Suze: you want to go on an emotional roller coaster with 228 00:15:20,809 --> 00:15:25,520 Suze: investing over a long period of time? I'm not sure 229 00:15:25,530 --> 00:15:29,440 Suze: you have what it takes, but you know your emotions 230 00:15:29,450 --> 00:15:31,609 Suze: and what kind of investor you are. 231 00:15:32,429 --> 00:15:35,760 Suze: And remember my law of money, it's better to invest 232 00:15:35,770 --> 00:15:40,830 Suze: in the known versus the unknown. The known is if 233 00:15:40,840 --> 00:15:45,400 Suze: you put $10,000 towards this mortgage, Oh, you will have 234 00:15:45,409 --> 00:15:47,960 Suze: it paid off sooner than later. 235 00:15:49,099 --> 00:15:53,440 Suze: The known is it will make you feel secure. The 236 00:15:53,450 --> 00:15:55,940 Suze: known is if you happen to get sick or in 237 00:15:55,950 --> 00:15:59,390 Suze: an accident or something and now you can't work and 238 00:15:59,400 --> 00:16:03,229 Suze: you can't afford to pay the mortgage. You don't have 239 00:16:03,239 --> 00:16:05,719 Suze: to worry about it because hopefully it will be paid 240 00:16:05,729 --> 00:16:09,159 Suze: off by then. Now, obviously, if you're gonna sell the 241 00:16:09,169 --> 00:16:12,710 Suze: home in a few years, if you're gonna move whatever, 242 00:16:12,719 --> 00:16:15,309 Suze: then you would not pay off the mortgage. 243 00:16:16,080 --> 00:16:18,440 Suze: But assuming you're gonna keep this home and this is 244 00:16:18,450 --> 00:16:22,289 Suze: your forever home and you have an extra $10,000 to 245 00:16:22,299 --> 00:16:26,960 Suze: do so, even at this low interest rate, I most 246 00:16:26,969 --> 00:16:31,099 Suze: certainly would pay it off. Not because it's the right 247 00:16:31,109 --> 00:16:35,020 Suze: thing to do possibly financially. It is the right thing 248 00:16:35,030 --> 00:16:40,530 Suze: to do psychologically emotionally personally. And therefore in the end financially. So that is my answer to you girlfriend. 249 00:16:49,239 --> 00:16:52,580 KT: I like this name, Leslie Anna. I have a pension 250 00:16:52,590 --> 00:16:58,289 KT: which today I can take $635 a month with COLA 251 00:16:58,299 --> 00:17:02,119 KT: or 832 without COLA. 252 00:17:02,380 --> 00:17:07,669 KT: My thought is to take $832 without Cola as the 253 00:17:07,680 --> 00:17:11,859 KT: better option. Lifespan in our family is in your nineties 254 00:17:11,869 --> 00:17:16,399 KT: just like you, Suze. Suze, tell everyone what COLA means. 255 00:17:16,410 --> 00:17:19,310 KT: I thought it was a drink when I started reading it. 256 00:17:20,060 --> 00:17:22,750 KT: I thought she forgot Coca Cola and Rum 257 00:17:23,390 --> 00:17:30,869 Suze: COLA, KT, C-O-L-A stands for cost of living adjustment. And what 258 00:17:30,880 --> 00:17:33,780 Suze: we don't have here, Leslie Anna is even though your 259 00:17:33,790 --> 00:17:38,589 Suze: lifespan in your family is till the 90s. How old 260 00:17:38,599 --> 00:17:39,869 Suze: are you? 261 00:17:40,359 --> 00:17:44,310 Suze: We also don't know if you were to take that money, 262 00:17:44,540 --> 00:17:48,229 Suze: the 8 32 right now, what would you do with 263 00:17:48,239 --> 00:17:51,819 Suze: the difference between the 635 that you would get with 264 00:17:51,829 --> 00:17:56,829 Suze: COLA versus the 832 without COLA? However, I want to 265 00:17:56,839 --> 00:17:58,250 Suze: say something to you. 266 00:17:58,959 --> 00:18:03,949 Suze: Inflation is pretty high right now, which means the cost 267 00:18:03,959 --> 00:18:08,229 Suze: of living adjustments for social security and things like that 268 00:18:08,380 --> 00:18:14,560 Suze: is also very high in about the 8% area. If 269 00:18:14,569 --> 00:18:19,310 Suze: it continued at, let's just say 8% in just four 270 00:18:19,319 --> 00:18:24,359 Suze: or five years, you would be at the 832, if 271 00:18:24,369 --> 00:18:28,290 Suze: you took the 635 with COLA. 272 00:18:28,959 --> 00:18:33,530 Suze: She wants to know, should she take $635 a month 273 00:18:33,540 --> 00:18:38,659 Suze: with the cost of living adjustment or just get 832 274 00:18:38,670 --> 00:18:42,619 Suze: a month right now with no cost of living adjustment? 275 00:18:42,849 --> 00:18:46,780 Suze: So the question has to be how long if she 276 00:18:46,790 --> 00:18:52,290 Suze: took the one for 635 with the cost of living adjustment, 277 00:18:53,130 --> 00:18:59,859 Suze: would it take her with inflation to equal the $832. 278 00:19:01,869 --> 00:19:05,099 Suze: But it all depends on what the cost of living 279 00:19:05,109 --> 00:19:09,930 Suze: adjustment is. If it's at 8%, it will take her 280 00:19:09,939 --> 00:19:13,979 Suze: about five years. If it's at 4%, it will take 281 00:19:13,989 --> 00:19:18,540 Suze: her about seven years. If it's only at 3%, it 282 00:19:18,550 --> 00:19:21,290 Suze: will take nine years. 283 00:19:21,969 --> 00:19:24,540 Suze: So, what you Leslie Anna have to know is that 284 00:19:24,550 --> 00:19:29,500 Suze: over the past 20 years, the average cost of living 285 00:19:29,510 --> 00:19:36,500 Suze: adjustment has been 2.2%. But many of those last 20 years, 286 00:19:36,510 --> 00:19:38,650 Suze: we were in a period of time where there was 287 00:19:38,660 --> 00:19:44,938 Suze: no inflation whatsoever. Look at where we are right now. 288 00:19:44,949 --> 00:19:48,839 Suze: Look at where they just raised the social security checks 289 00:19:48,849 --> 00:19:50,399 Suze: by over 8%. 290 00:19:51,130 --> 00:19:55,290 Suze: So I have to tell you if you're in your 291 00:19:55,300 --> 00:20:00,439 Suze: 60s or even early 70s and you don't need that 292 00:20:00,449 --> 00:20:03,510 Suze: extra $200 a month right now, which by the way 293 00:20:03,520 --> 00:20:07,179 Suze: is taxable. So that's not exactly what you put in 294 00:20:07,189 --> 00:20:11,500 Suze: your pocket. Does that extra $2400 a year, 295 00:20:12,010 --> 00:20:17,290 Suze: the difference between the pension without COLA the pension with COLA, 296 00:20:17,349 --> 00:20:21,688 Suze: which is about $200 more a month or $2400 a year. 297 00:20:21,699 --> 00:20:24,540 Suze: Does that put you in a higher income tax bracket? 298 00:20:24,550 --> 00:20:28,140 Suze: Does that make your social security taxable? Does that make 299 00:20:28,150 --> 00:20:31,040 Suze: your Medicare B premiums taxable? 300 00:20:31,430 --> 00:20:34,339 Suze: I have a feeling if you are in your sixties 301 00:20:34,349 --> 00:20:37,680 Suze: or again, early seventies, you are in good health. And 302 00:20:37,689 --> 00:20:41,969 Suze: your lifespan carries over to you. I would absolutely do 303 00:20:42,030 --> 00:20:48,198 Suze: the cost of living adjustment at 635. That surprised you. 304 00:20:48,380 --> 00:20:50,989 KT: It did because I would go for the money. But what 305 00:20:51,000 --> 00:20:56,000 KT: you just said, makes total sense. I can't imagine it 306 00:20:56,010 --> 00:20:58,800 KT: going down dramatically to 2%. 307 00:20:59,550 --> 00:21:03,780 Suze: It could and they want it to. But as all of, 308 00:21:03,790 --> 00:21:08,919 Suze: you know, nothing is working on inflation. So I just 309 00:21:08,930 --> 00:21:11,579 Suze: would think that it's going to take a number of 310 00:21:11,589 --> 00:21:15,438 Suze: years and all she would have needed in that situation 311 00:21:15,449 --> 00:21:18,339 Suze: would have been four or five years at the current 312 00:21:18,349 --> 00:21:21,400 Suze: cost of living adjustment and she'd be at what she 313 00:21:21,410 --> 00:21:22,599 Suze: is now. So 314 00:21:23,020 --> 00:21:28,339 Suze: that's given the economic circumstances, that's what I would do, 315 00:21:28,349 --> 00:21:32,439 Suze: given her personal circumstances that's up to her because I 316 00:21:32,449 --> 00:21:34,829 Suze: don't know, does she have money? Does she not? Can 317 00:21:34,839 --> 00:21:36,520 Suze: she pay her bills? Can she not? But that will be up to her. And next question my KT. 318 00:21:40,430 --> 00:21:43,489 KT: This next question is from one of the best... 319 00:21:43,500 --> 00:21:49,040 Suze: Oh, we're at that time. Again, you need a haircut. I'm looking 320 00:21:49,060 --> 00:21:49,619 Suze: at you. 321 00:21:49,849 --> 00:21:53,619 KT: I am getting you getting one in two days, a 322 00:21:54,599 --> 00:21:58,180 KT: short one for the summer. Ok. This next question is 323 00:21:58,189 --> 00:22:01,390 KT: from Laurie V and Laurie is probably one of your 324 00:22:01,400 --> 00:22:04,430 KT: very top of the class Suze students. 325 00:22:05,088 --> 00:22:07,228 KT: She goes on, I'm not gonna share this with all 326 00:22:07,238 --> 00:22:11,057 KT: of you because it's a really long update on how 327 00:22:11,067 --> 00:22:13,967 KT: well she's doing with her money, but she ends it 328 00:22:13,978 --> 00:22:16,947 KT: with this sentence, I try to always stand in my 329 00:22:16,958 --> 00:22:21,338 KT: financial truth, live within my needs, but below my means 330 00:22:21,348 --> 00:22:26,858 KT: and spend according to my needs versus wants, great student. 331 00:22:27,307 --> 00:22:31,697 KT: So here's your question, here's Laurie's question. What happens Suze, 332 00:22:31,708 --> 00:22:32,937 KT: when you retire? Do you want me to answer it, Suzie? 333 00:22:34,666 --> 00:22:35,805 Suze: What does that mean? What happens? 334 00:22:36,776 --> 00:22:37,594 KT: You have fun. 335 00:22:37,645 --> 00:22:38,895 Suze: Is that how she ends it? 336 00:22:38,906 --> 00:22:41,826 KT: No, no, no. This was after she told me all 337 00:22:41,836 --> 00:22:42,406 KT: about her. 338 00:22:42,446 --> 00:22:44,775 Suze: But is her question, what happens after you retire? 339 00:22:44,786 --> 00:22:49,666 KT: For instance, taking out RMDs. Can you take it out from 340 00:22:49,676 --> 00:22:53,014 KT: just one retirement account or do you take it out 341 00:22:53,026 --> 00:22:57,446 KT: across all retirement accounts? So how are you taxed with 342 00:22:57,455 --> 00:23:01,234 KT: your Social security and RMDs? But to 343 00:23:01,323 --> 00:23:04,082 KT: the question is what happens when you retire? You're supposed 344 00:23:04,093 --> 00:23:04,693 KT: to have fun, Laurie. 345 00:23:06,384 --> 00:23:10,323 Suze: Well, the real question there was not that KT her 346 00:23:10,333 --> 00:23:18,114 Suze: real question really is about RMDs, required minimum distributions if 347 00:23:18,124 --> 00:23:22,313 Suze: you have more than one retirement account, meaning you have 348 00:23:22,323 --> 00:23:25,354 Suze: money in a 401k. Maybe you have money in a 349 00:23:25,364 --> 00:23:29,354 Suze: traditional IRA. Maybe you have an Ira rollover. Maybe 350 00:23:29,442 --> 00:23:33,891 Suze: you have a SEP IRA, a simple IRA. Any money that 351 00:23:33,901 --> 00:23:39,072 Suze: you have that is in a traditional IRA, meaning you've 352 00:23:39,082 --> 00:23:43,452 Suze: never paid taxes on it. All of those sums have 353 00:23:43,462 --> 00:23:47,751 Suze: to be added together and your required minimum distributions are 354 00:23:47,761 --> 00:23:52,232 Suze: figured out on that. You can take that amount from 355 00:23:52,241 --> 00:23:55,972 Suze: one account, but it's on all the money that you have, 356 00:23:55,982 --> 00:23:57,452 Suze: which is again why 357 00:23:57,560 --> 00:24:02,379 Suze: I happen to love Roth retirement accounts because with a 358 00:24:02,390 --> 00:24:06,459 Suze: Roth IRA or now, even because of the Secure Act 359 00:24:06,469 --> 00:24:10,790 Suze: two point oh, Roth 401k s, you do not have 360 00:24:10,800 --> 00:24:14,829 Suze: to take out R M DS anymore. And that's a 361 00:24:14,839 --> 00:24:18,639 Suze: big deal then why is that a big deal? Because 362 00:24:18,939 --> 00:24:22,969 Suze: you ask here, Laurie, how are you taxed with your 363 00:24:22,979 --> 00:24:25,589 Suze: social security and R M DS 364 00:24:25,949 --> 00:24:31,550 Suze: when you take out required minimum distributions from a non 365 00:24:31,619 --> 00:24:37,239 Suze: Roth retirement account, they are absolutely counted towards your income. 366 00:24:37,660 --> 00:24:42,609 Suze: So depending on your income and the level that it's at, 367 00:24:42,859 --> 00:24:47,380 Suze: you will pay income tax on your social security and 368 00:24:47,390 --> 00:24:52,219 Suze: probably your part B of your Medicare premium. That's what 369 00:24:52,229 --> 00:24:54,679 Suze: you need to know. Next question KT. 370 00:24:56,189 --> 00:24:57,180 KT: This is from Karen. 371 00:24:57,189 --> 00:24:59,920 Suze: Do you know that I love, say next question KT! 372 00:25:01,650 --> 00:25:05,198 KT: If I have a three month CD at 3% and 373 00:25:05,209 --> 00:25:09,079 KT: the maturity rate has gone up to 4% and I 374 00:25:09,089 --> 00:25:13,958 KT: decide to leave that CD there, do I automatically get 375 00:25:13,969 --> 00:25:17,739 KT: the new higher interest rate for the next three months 376 00:25:17,750 --> 00:25:21,420 KT: or do I have to cash it out and buy 377 00:25:21,430 --> 00:25:24,359 KT: a new CD to get a new higher rate? 378 00:25:24,469 --> 00:25:28,020 Suze: So let me give you an example using the Alliant 379 00:25:28,030 --> 00:25:32,958 Suze: Credit Union CDS when you sign up for them right 380 00:25:32,969 --> 00:25:36,199 Suze: now and you would do so by going to my 381 00:25:36,420 --> 00:25:42,160 Suze: alliant dot com slash ultimate, you have the ability to 382 00:25:42,170 --> 00:25:46,469 Suze: renew the CD. So currently, let's say you did a 383 00:25:46,489 --> 00:25:50,179 Suze: three month CD at 4.85% 384 00:25:50,550 --> 00:25:55,420 Suze: and it absolutely matures in three months. If you signed 385 00:25:55,430 --> 00:26:00,030 Suze: up to have it renewed, it would automatically roll over 386 00:26:00,040 --> 00:26:03,989 Suze: into whatever the interest rate is being given on the 387 00:26:04,000 --> 00:26:07,869 Suze: new three month CD. So that's how it works. If 388 00:26:07,880 --> 00:26:10,000 Suze: you don't want that to happen, 389 00:26:10,250 --> 00:26:14,500 Suze: then you usually just contact your firm wherever you bought 390 00:26:14,510 --> 00:26:18,198 Suze: it from and you make sure that it doesn't renew 391 00:26:18,209 --> 00:26:21,729 Suze: if you don't want it to automatically roll over. 392 00:26:21,739 --> 00:26:26,339 KT: Ok, Suze, one more question before my quizzie time. Ready? 393 00:26:26,390 --> 00:26:30,510 KT: This is rather long. It's from Lindsay. Hi, Suze and KT, 394 00:26:30,869 --> 00:26:35,380 KT: on the March 2nd podcast Suze answered a question about 395 00:26:35,390 --> 00:26:37,280 KT: paying financial advisors. 396 00:26:37,770 --> 00:26:42,020 KT: I have a financial advisor who charges a set percentage 397 00:26:42,030 --> 00:26:46,859 KT: on my portfolio, but he has all of my money 398 00:26:46,869 --> 00:26:48,939 KT: in eight different mutual funds. 399 00:26:48,949 --> 00:26:50,879 Suze: Danger, sign, danger, sign, danger. 400 00:26:50,890 --> 00:26:54,380 KT: Wait, wait, wait. Well, she's already in danger zone. It 401 00:26:54,390 --> 00:26:58,540 KT: doesn't seem like he's actively managing my money at all. 402 00:26:58,550 --> 00:26:59,339 Suze: He's not. 403 00:27:02,229 --> 00:27:05,660 KT: Wait, wait, Suze, he just took my money and purchased mutual funds that 404 00:27:05,670 --> 00:27:07,239 KT: sit long term. 405 00:27:07,250 --> 00:27:08,000 Suze: He did. 406 00:27:09,969 --> 00:27:13,469 KT: I can tell where this is going everyone. Last summer 407 00:27:13,479 --> 00:27:17,939 KT: when I started to realize this, I stopped DCA, Dollar 408 00:27:17,949 --> 00:27:21,880 KT: cost averaging into the account and opened my own vanguard account 409 00:27:23,430 --> 00:27:28,869 KT: that I now manage. Yeah, baby. Yeah. You rock girl. Now, 410 00:27:28,880 --> 00:27:31,760 KT: my question is, what do I do with the money 411 00:27:31,770 --> 00:27:35,040 KT: in the portfolio that he manages. Wait, she has a 412 00:27:35,050 --> 00:27:37,939 KT: big question mark after the word manage. 413 00:27:38,609 --> 00:27:41,420 KT: So anyway, she said the mutual funds he has me 414 00:27:41,430 --> 00:27:44,099 KT: and aren't available through Vanguard. So I don't know what 415 00:27:44,109 --> 00:27:47,530 KT: the equivalents are, blah, blah, blah. Should I wait until 416 00:27:47,540 --> 00:27:52,569 KT: the account recovers what has been lost since January 2022? 417 00:27:52,729 --> 00:27:55,400 KT: I really want to get away from this guy so 418 00:27:55,410 --> 00:27:57,938 KT: I can start saving more money. 419 00:27:57,949 --> 00:28:00,910 Suze: If you really want to get away from him. It's 420 00:28:00,920 --> 00:28:04,890 Suze: like you're in a relationship, just image this Lindsay, right? 421 00:28:04,900 --> 00:28:08,198 Suze: You're in a relationship with somebody that you really want, 422 00:28:08,420 --> 00:28:13,060 Suze: to get away from because it's a bad relationship. You know, 423 00:28:13,119 --> 00:28:16,699 Suze: they don't really pay attention to you. They're not doing anything, 424 00:28:16,709 --> 00:28:21,270 Suze: they're costing you money, you're providing for them, you're supporting them. 425 00:28:21,359 --> 00:28:23,438 Suze: What are you gonna do? You're gonna wait until you 426 00:28:23,449 --> 00:28:27,420 Suze: think one day that relationship may get good. No, you 427 00:28:27,430 --> 00:28:31,760 Suze: are going to leave right now and go wherever you can. 428 00:28:31,770 --> 00:28:36,280 Suze: N aybe vanguard doesn't do the mutual funds that this 429 00:28:36,290 --> 00:28:37,859 Suze: person did for you. 430 00:28:38,189 --> 00:28:42,540 Suze: But chances are maybe another brokerage firm might. So you 431 00:28:42,550 --> 00:28:47,219 Suze: would check with Fidelity or Schwab and things like that 432 00:28:47,229 --> 00:28:51,060 Suze: or if you have a loss in these. Now, listen 433 00:28:51,069 --> 00:28:54,680 Suze: to me closely. You have a loss in these accounts 434 00:28:55,469 --> 00:28:59,650 Suze: and you don't want to continue paying the management fee 435 00:28:59,660 --> 00:29:02,040 Suze: to him as well as the management fee, believe it 436 00:29:02,050 --> 00:29:05,229 Suze: or not within the accounts and they're outside of a 437 00:29:05,239 --> 00:29:08,180 Suze: retirement account, which I think they are because you didn't 438 00:29:08,189 --> 00:29:11,520 Suze: say they were in a retirement account. Sell them. 439 00:29:12,130 --> 00:29:17,089 Suze: Sell them at a loss. Now, you have a loss 440 00:29:17,099 --> 00:29:20,959 Suze: that you can take off your taxes. If you have 441 00:29:20,969 --> 00:29:26,420 Suze: nothing to offset that loss, you can offset $3,000 a 442 00:29:26,430 --> 00:29:27,979 Suze: year of income 443 00:29:28,270 --> 00:29:32,989 Suze: until that entire loss is used up. Now, you have 444 00:29:33,000 --> 00:29:37,020 Suze: that money and you can invest it however you want, 445 00:29:37,229 --> 00:29:40,069 Suze: you might decide you want to simply keep it safe 446 00:29:40,079 --> 00:29:42,719 Suze: and sound right now because the markets very well could 447 00:29:42,729 --> 00:29:43,959 Suze: continue down 448 00:29:44,290 --> 00:29:47,680 Suze: and put it in either a certificate of deposit or 449 00:29:47,689 --> 00:29:51,250 Suze: a treasury bill or you may decide to continue to 450 00:29:51,260 --> 00:29:56,619 Suze: dollar cost average into your Vanguard companies that you're in 451 00:29:56,630 --> 00:30:00,599 Suze: or even if you were to open up another company 452 00:30:00,609 --> 00:30:03,319 Suze: at a discount brokerage firm, another one if you wanted 453 00:30:03,329 --> 00:30:04,760 Suze: to into 454 00:30:04,854 --> 00:30:11,834 Suze: some good dividend paying ETFs and they're out there. So no, 455 00:30:11,844 --> 00:30:14,675 Suze: you are not to stay with somebody who's being disrespectful 456 00:30:14,685 --> 00:30:18,145 Suze: to you. You are paying isn't paying any attention to 457 00:30:18,155 --> 00:30:20,005 Suze: you and you don't even want to be with this 458 00:30:20,015 --> 00:30:25,364 Suze: person anymore. Break up. Financial divorce court has just decided. 459 00:30:26,119 --> 00:30:32,979 KT: I like that. Ok. Quizzie time. 460 00:30:33,589 --> 00:30:38,420 Suze: All right. Quizzie time is where I pick out a 461 00:30:38,430 --> 00:30:43,060 Suze: question that I think all of you should know. And 462 00:30:43,069 --> 00:30:48,369 Suze: I ask KT the question, she has to think about 463 00:30:48,380 --> 00:30:48,400 Suze: it 464 00:30:48,780 --> 00:30:52,869 Suze: and then you should also be thinking about it and 465 00:30:52,880 --> 00:30:56,589 Suze: I tell you whether or not she has it right. 466 00:30:56,959 --> 00:31:02,180 Suze: Are we ready, KT? Are your financial engines roaring? 467 00:31:02,920 --> 00:31:03,849 KT: No. 468 00:31:04,430 --> 00:31:05,880 Suze: Are they started at least? 469 00:31:05,890 --> 00:31:09,969 KT: Yes. But I'm never real excited about quizzies, which everyone knows. 470 00:31:09,979 --> 00:31:12,469 KT: But go ahead, I'm willing to play. 471 00:31:12,479 --> 00:31:14,540 Suze: Shall we all play a guess? Here? She's got to 472 00:31:14,550 --> 00:31:16,430 Suze: get it right. She's got to get it wrong? 473 00:31:16,630 --> 00:31:18,609 KT: Don't ever bet with Suze everybody 474 00:31:18,680 --> 00:31:22,630 KT: Ever don't ever ever bet because Suze always wins. 475 00:31:22,640 --> 00:31:24,500 Suze: If I were a betting woman here, I would say 476 00:31:24,510 --> 00:31:26,199 Suze: KT is going to get it wrong, but I really 477 00:31:26,209 --> 00:31:30,630 Suze: hope you get it right. All right. Hi, Susie and KT, 478 00:31:31,209 --> 00:31:34,530 Suze: I had a question about protection on your money. 479 00:31:35,010 --> 00:31:39,420 Suze: FDIC covers anything issued by a bank, not anything Lisa 480 00:31:39,430 --> 00:31:43,530 Suze: up to 250,000. Unless you have multiple beneficiaries. Then it's 481 00:31:43,540 --> 00:31:48,270 Suze: more and credit unions by N C U A. What 482 00:31:48,319 --> 00:31:49,349 Suze: is SIPC, S-I-P-C? 483 00:31:52,939 --> 00:31:56,050 Suze: Does it cover investments if they are held in a 484 00:31:56,060 --> 00:32:01,310 Suze: brokerage account only? Are there any other protections to look for? 485 00:32:01,319 --> 00:32:05,069 Suze: Can you explain? Thank you both, Lisa. 486 00:32:05,819 --> 00:32:09,819 KT: Ok. Can I answer it? But do I have to explain? 487 00:32:10,160 --> 00:32:12,839 KT: I don't know exactly what it stands for but it 488 00:32:12,849 --> 00:32:16,109 KT: has to do with my statements I get for my 489 00:32:16,119 --> 00:32:19,500 KT: stock portfolio. I see it all the time. It's on 490 00:32:19,510 --> 00:32:20,849 KT: like every one of them. 491 00:32:21,180 --> 00:32:23,359 Suze: And you've never asked what it's about? 492 00:32:23,500 --> 00:32:26,229 KT: I figure. No, I figure it's something that has to 493 00:32:26,239 --> 00:32:31,510 KT: do with protecting me. There's a p in it. Protection. 494 00:32:32,569 --> 00:32:36,260 KT: Really. I, I don't know exactly what it means but 495 00:32:36,270 --> 00:32:38,369 KT: I think it has to do with my stock portfolio. 496 00:32:38,380 --> 00:32:41,680 Suze: But you don't. So, for instance, if your stock portfolio 497 00:32:41,689 --> 00:32:45,959 Suze: were to go down, would it protect you against those losses? 498 00:32:48,329 --> 00:32:51,219 KT: I'm not sure. I'm not sure. 499 00:32:51,229 --> 00:32:52,839 Suze: I told you she wouldn't know. 500 00:32:53,359 --> 00:32:54,380 KT: I'm not sure. 501 00:32:54,390 --> 00:32:58,099 Suze: That that means (wrong answer noise) you either know or you don't know. 502 00:32:58,109 --> 00:33:00,859 Suze: I'm not sure is not an answer. 503 00:33:01,530 --> 00:33:04,859 KT: Security s wait, what is it? What's the initials? 504 00:33:05,530 --> 00:33:06,479 Suze: S-I-P-C. 505 00:33:10,280 --> 00:33:12,050 KT: Security Protection Investment company? 506 00:33:12,890 --> 00:33:21,339 Suze: That's close. But anyway, it stands for securities investor protection Corp. Ok. Company. Right. 507 00:33:21,349 --> 00:33:23,339 Suze: So you got that part, right. 508 00:33:23,729 --> 00:33:27,599 Suze: But what it does everybody is, it gives you up 509 00:33:27,609 --> 00:33:33,859 Suze: to $500,000 of insurance per customer. But that includes up 510 00:33:33,869 --> 00:33:39,400 Suze: to only $250,000 in cash. For instance, Lehman Brothers went 511 00:33:39,410 --> 00:33:47,339 Suze: under and you had money in there, right? That protected you. 512 00:33:47,839 --> 00:33:53,400 Suze: However, it does not protect you against loss with investments 513 00:33:53,569 --> 00:33:57,689 Suze: and many people make that mistake. It only protects you 514 00:33:57,699 --> 00:34:02,510 Suze: if the brokerage firm essentially goes under or something happens 515 00:34:02,520 --> 00:34:03,130 Suze: to them. 516 00:34:04,160 --> 00:34:09,550 Suze: If you bought stocks and let's say you bought $250,000 517 00:34:09,560 --> 00:34:13,889 Suze: of stocks and now those companies went belly up, the 518 00:34:13,899 --> 00:34:17,799 Suze: companies themselves were bad, they just went belly up. All 519 00:34:17,810 --> 00:34:24,899 Suze: of them. Too bad. Investments are not protected against investment loss. 520 00:34:25,120 --> 00:34:30,090 Suze: SIPC protects you against the brokerage firm itself 521 00:34:30,459 --> 00:34:33,870 Suze: going under. And again, a lot of times when there's 522 00:34:33,879 --> 00:34:37,909 Suze: a loss like that, another brokerage firm will buy all 523 00:34:37,919 --> 00:34:41,239 Suze: the assets that are in there. So then everybody really 524 00:34:41,250 --> 00:34:47,129 Suze: is protected. But KT that is a perfect lead in 525 00:34:47,250 --> 00:34:51,790 Suze: to what Suze School this coming Sunday is going to be 526 00:34:51,800 --> 00:34:55,388 Suze: all about. I'm going to go into detail 527 00:34:55,860 --> 00:35:00,580 Suze: about the difference between a money market account and a 528 00:35:00,590 --> 00:35:06,009 Suze: money market mutual fund. Got that everybody? You have got 529 00:35:06,020 --> 00:35:08,820 Suze: to know the difference of the two and the difference 530 00:35:08,830 --> 00:35:12,219 Suze: of what is covered by FDIC as well as what 531 00:35:12,229 --> 00:35:16,659 Suze: is covered by SIPC and what does it really mean? 532 00:35:17,040 --> 00:35:22,908 Suze: So that's what Suze School is gonna be about. All right, KT, that ends this. 533 00:35:25,120 --> 00:35:27,320 Suze: Are you ready? You know how we end it, right? 534 00:35:27,330 --> 00:35:28,699 KT: I do. Are we ready? 535 00:35:28,709 --> 00:35:31,320 Suze: Are you ready? Are you sure? 536 00:35:31,330 --> 00:35:34,169 KT: Wherever we go today... 537 00:35:34,179 --> 00:35:34,550 Suze: No. 538 00:35:34,649 --> 00:35:38,919 KT: whatever we do today... today we will create... All right, you do it. 539 00:35:40,699 --> 00:35:45,219 Suze: All right, everybody. So there's only one thing that we 540 00:35:45,229 --> 00:35:49,340 Suze: want you to say every single day and it is 541 00:35:49,350 --> 00:35:54,959 Suze: as follows: today, wherever I go, I will create a 542 00:35:55,050 --> 00:36:00,610 Suze: more peaceful, joyful and loving world. You bet we will 543 00:36:00,620 --> 00:36:05,830 Suze: and if you do, you will be unstoppable.