1 00:00:23,010 --> 00:00:27,709 Robert: December 28th, 2023. Hi, everybody. This is Robert, Suze and 2 00:00:27,719 --> 00:00:31,610 Robert: KTs producer and welcome to the Women and Money podcast 3 00:00:31,620 --> 00:00:35,310 Robert: as well as everyone smart enough to listen. Now that 4 00:00:35,319 --> 00:00:38,310 Robert: we're in the last week of December. A lot of 5 00:00:38,319 --> 00:00:40,500 Robert: us are probably off from work. 6 00:00:40,779 --> 00:00:45,720 Robert: We're relaxing after the excitement and the stress of the holidays, 7 00:00:45,729 --> 00:00:51,279 Robert: maybe doing a little reflecting, getting ready for 2024. And 8 00:00:51,290 --> 00:00:54,700 Robert: in that spirit, I decided Suze and KT needed a 9 00:00:54,709 --> 00:00:58,060 Robert: couple of extra days off from work as well. So 10 00:00:58,099 --> 00:01:02,959 Robert: today's podcast is going to be highlights from an Ask KT 11 00:01:02,970 --> 00:01:04,040 Robert: and Suze Anything 12 00:01:04,489 --> 00:01:08,149 Robert: episode that we did earlier this year entitled What is 13 00:01:08,160 --> 00:01:11,669 Robert: the most important lesson to teach your kids? We'll be 14 00:01:11,680 --> 00:01:14,660 Robert: back with a brand new episode this coming Sunday. 15 00:01:15,339 --> 00:01:15,919 Robert: Enjoy 16 00:01:16,019 --> 00:01:19,370 KT: First, everyone. Thank you for sending such great questions. I 17 00:01:19,379 --> 00:01:23,279 KT: have a really nice mixed assortment here, almost like a 18 00:01:23,290 --> 00:01:26,769 KT: box of chocolates. I'm very happy about today versus... 19 00:01:27,199 --> 00:01:28,459 Suze: A box of chocolates? 20 00:01:28,889 --> 00:01:34,129 KT: Yes. First is from Jennifer. Hi, Suze and KT. It's because of you, 21 00:01:34,139 --> 00:01:37,779 KT: I became interested in finance and years later decided to 22 00:01:37,790 --> 00:01:40,199 KT: pursue a career in it. Thank you. 23 00:01:40,480 --> 00:01:43,619 KT: And then Jennifer's asking, Suze, would you help me and 24 00:01:43,629 --> 00:01:46,940 KT: other listeners understand how trust work 25 00:01:47,260 --> 00:01:50,339 KT: my mom is considering one to start the five year 26 00:01:50,349 --> 00:01:53,800 KT: look back. But I'm wondering if my sister and I 27 00:01:53,809 --> 00:01:57,160 KT: would lose the step up and cost basis on her 28 00:01:57,169 --> 00:02:02,839 KT: home when she passes any guidance you provide is greatly appreciated. 29 00:02:02,849 --> 00:02:06,430 Suze: So you just picked a really simple question, right? To 30 00:02:06,440 --> 00:02:08,258 Suze: start this podcast. 31 00:02:08,490 --> 00:02:11,970 KT: I picked the most important one. I felt everyone needs 32 00:02:11,979 --> 00:02:12,919 KT: a will and a trust. 33 00:02:12,929 --> 00:02:16,600 Suze: So Jennifer here's what's very important for you to understand 34 00:02:17,070 --> 00:02:20,860 Suze: that. When you say my mom is considering a trust 35 00:02:20,869 --> 00:02:25,889 Suze: to start the five year, look back, everybody do not 36 00:02:25,899 --> 00:02:30,479 Suze: get confused between what a five year look back is 37 00:02:30,910 --> 00:02:35,850 Suze: and a five year holding period for your Roth retirement 38 00:02:35,860 --> 00:02:41,179 Suze: accounts very, very different when you get older. If you 39 00:02:41,190 --> 00:02:43,199 Suze: need to on any level, 40 00:02:44,130 --> 00:02:48,860 Suze: possibly think that you're going to have to apply for Medicaid. 41 00:02:49,270 --> 00:02:52,500 Suze: And Medicaid is when you go into, let's say a 42 00:02:52,508 --> 00:02:55,669 Suze: nursing home and you want Medicaid to pay for it 43 00:02:55,679 --> 00:02:57,910 Suze: versus your own money. 44 00:02:59,059 --> 00:03:04,320 Suze: What happens is whenever you apply for Medicaid, they will 45 00:03:04,330 --> 00:03:07,720 Suze: look back for five years 46 00:03:08,360 --> 00:03:13,789 Suze: to see what money have you given away within that 47 00:03:13,800 --> 00:03:18,520 Suze: five year period of time, that then disqualifies you from 48 00:03:18,529 --> 00:03:23,859 Suze: Medicaid money that you've given away before five years of 49 00:03:23,869 --> 00:03:27,459 Suze: a look back, that money is included. So if mommy 50 00:03:27,470 --> 00:03:30,509 Suze: was to give you money, Jennifer, if mommy was to 51 00:03:30,520 --> 00:03:32,750 Suze: do something else with money to get it out of 52 00:03:32,758 --> 00:03:33,779 Suze: her estate 53 00:03:34,399 --> 00:03:40,380 Suze: and then five years pass from that time, then Medicaid 54 00:03:40,389 --> 00:03:43,820 Suze: cannot go back on the money that she gave away. 55 00:03:43,830 --> 00:03:47,380 Suze: But there's a five year look back. Now, 56 00:03:47,710 --> 00:03:52,669 KT: will a trust make it so that you no longer 57 00:03:52,679 --> 00:03:55,089 KT: get a step up in cost base on her home 58 00:03:55,100 --> 00:03:59,300 KT: when she passes? No, it won't. You will be fined 59 00:03:59,309 --> 00:04:01,380 KT: that way. Next question, KT. 60 00:04:01,710 --> 00:04:05,690 KT: Ok, next question, Suze is from Clay. Clay. We're gonna 61 00:04:05,699 --> 00:04:08,919 KT: send a little luck your way. Clay said hi, Suze 62 00:04:08,929 --> 00:04:11,250 KT: and KT. I won the lottery 63 00:04:11,729 --> 00:04:16,329 KT: and then they, then, ok, maybe I didn't. The question 64 00:04:16,339 --> 00:04:19,828 KT: is this, is there ever a scenario, Suze where you 65 00:04:19,839 --> 00:04:23,609 KT: should take the annuity over the cash amount? 66 00:04:23,640 --> 00:04:27,369 Suze: Actually, there is my dear Clay. Do you know that 67 00:04:27,380 --> 00:04:33,029 Suze: I have a friend who won the lottery twice? Right. 68 00:04:33,040 --> 00:04:35,070 Suze: KT is looking at me, Annie. 69 00:04:35,390 --> 00:04:40,720 Suze: Right. Right. She won it twice and the first time 70 00:04:40,730 --> 00:04:43,529 Suze: she got quite a bit of money for her anyway, 71 00:04:43,540 --> 00:04:46,420 Suze: it was like three or $4 million I believe and 72 00:04:46,428 --> 00:04:46,980 Suze: blew it 73 00:04:47,630 --> 00:04:51,940 Suze: and then she won it again and I think may 74 00:04:51,950 --> 00:04:55,890 Suze: have blown it. But the point of the matter is 75 00:04:56,290 --> 00:05:01,768 Suze: that if it's a really large sum, I mean, image it, 76 00:05:01,779 --> 00:05:05,679 Suze: everybody here you are. And all of a sudden after 77 00:05:05,690 --> 00:05:12,170 Suze: taxes you are going to have 304 105 $100 million. 78 00:05:12,178 --> 00:05:13,399 Suze: Possibly 79 00:05:14,089 --> 00:05:18,029 Suze: that is all of a sudden years. Would you know 80 00:05:18,040 --> 00:05:20,149 Suze: what to do with it? Really? 81 00:05:21,059 --> 00:05:25,250 Suze: If you don't think that is a tremendous responsibility, I'm 82 00:05:25,260 --> 00:05:30,119 Suze: here to tell you, it absolutely is. So, depending on 83 00:05:30,130 --> 00:05:34,910 Suze: your sophistication and the amount of money that you're winning 84 00:05:34,920 --> 00:05:38,928 Suze: in the lottery, in that case, you might be better 85 00:05:38,940 --> 00:05:42,160 Suze: off just taking the annuity and knowing that you're going 86 00:05:42,170 --> 00:05:45,880 Suze: to have income coming in every single year for a 87 00:05:45,890 --> 00:05:47,630 Suze: long period of time. 88 00:05:48,178 --> 00:05:52,289 Suze: However, if somebody like me truthfully was to win the lottery, 89 00:05:52,450 --> 00:05:56,630 Suze: I would take it in a lump sum. But all 90 00:05:56,640 --> 00:05:59,730 Suze: the people that have come to me who have won 91 00:05:59,738 --> 00:06:03,970 Suze: the lottery and taken it in a lump sum. I'm 92 00:06:03,980 --> 00:06:07,880 Suze: here to tell you that money is totally gone. 93 00:06:08,329 --> 00:06:10,849 Suze: Your family comes out of the woodwork. You want to 94 00:06:10,859 --> 00:06:14,618 Suze: do this, you want to do that, be very, very careful. 95 00:06:14,709 --> 00:06:19,109 Suze: So that's the type of situation that can get you 96 00:06:19,119 --> 00:06:21,849 Suze: in trouble, believe it or not. Go on KT. Would 97 00:06:21,859 --> 00:06:24,910 Suze: you take it in a lump sum without me? 98 00:06:25,019 --> 00:06:27,469 KT: At this age? Absolutely. 99 00:06:27,738 --> 00:06:29,988 Suze: Would you know what to do with it? Let's say 100 00:06:30,000 --> 00:06:31,100 Suze: it was a large one. 101 00:06:31,640 --> 00:06:33,578 KT: I would probably sit down and... 102 00:06:33,589 --> 00:06:36,618 Suze: Call John. All right. Go on, give me. All right. 103 00:06:36,630 --> 00:06:37,390 Suze: Go on 104 00:06:37,700 --> 00:06:41,290 KT: Ready. This next one's from Mary Anne now, Mary Anne's 37. 105 00:06:41,299 --> 00:06:44,959 KT: Her husband's 47. They are first time parents and they 106 00:06:44,970 --> 00:06:48,000 KT: live in New Jersey. They have a daughter who is 107 00:06:48,010 --> 00:06:52,190 KT: now five months old. And Mary Anne said, Suze, I'm 108 00:06:52,200 --> 00:06:55,500 KT: lost as to what? To set up for her savings. 109 00:06:55,510 --> 00:07:00,250 KT: Checking CDs. I've never been a particularly good saver, but 110 00:07:00,260 --> 00:07:01,820 KT: I wanna do it for her. 111 00:07:02,549 --> 00:07:04,320 KT: You should do it, Mommy. You should do it for 112 00:07:04,329 --> 00:07:07,540 KT: you first. All right, ready. We opened a 529 in 113 00:07:07,549 --> 00:07:11,059 KT: New York and we'll try to max out the contribution 114 00:07:11,070 --> 00:07:11,880 KT: for the year. 115 00:07:12,320 --> 00:07:15,980 KT: And so she's asking you, Suze, what do you recommend? 116 00:07:16,089 --> 00:07:19,390 KT: What do they do? Now, the little girl is getting 117 00:07:19,450 --> 00:07:22,600 KT: gifts for birthdays. Um All kinds of events, 118 00:07:23,049 --> 00:07:26,239 Suze: That's simple, put it all in the 529. You know, be very 119 00:07:26,250 --> 00:07:30,649 Suze: careful about opening up, you know, uniform gift to miners 120 00:07:30,679 --> 00:07:32,859 Suze: a account for her and things like that because that 121 00:07:32,869 --> 00:07:34,179 Suze: will count even more so 122 00:07:34,424 --> 00:07:39,454 KT: against financial aid. So just take all of her gifts 123 00:07:39,545 --> 00:07:45,325 KT: and add it into her 529 plan. Not a big deal. Yes. 124 00:07:45,334 --> 00:07:48,154 KT: Ok. Suze this question is a good story... 125 00:07:48,325 --> 00:07:51,454 Suze: But KT, don't, you want to tell everybody how they 126 00:07:51,464 --> 00:07:54,734 Suze: can write in and ask a question so that if 127 00:07:54,744 --> 00:07:58,975 Suze: you choose it, it'll be on the podcast. Tell them, KT, 128 00:07:58,984 --> 00:07:59,654 Suze: how do they do it? 129 00:07:59,665 --> 00:08:02,234 KT: You can do it two ways. Actually, you can go 130 00:08:02,244 --> 00:08:03,815 KT: to Suze's app 131 00:08:04,500 --> 00:08:06,529 KT: and you can go to the wall and you can 132 00:08:06,540 --> 00:08:08,269 KT: post a question there. 133 00:08:08,489 --> 00:08:10,380 Suze: Yeah, that's right. Go on 134 00:08:13,350 --> 00:08:15,209 KT: Or you can go to women and Money Podcast. 135 00:08:15,540 --> 00:08:20,119 Suze: I knew it, I knew it, everybody you would go 136 00:08:20,130 --> 00:08:22,809 Suze: to ask Susie Podcast. 137 00:08:22,820 --> 00:08:27,170 KT: Allright, I forgot that. Ask Suze Podcast... 138 00:08:27,369 --> 00:08:30,480 Suze: Are you kidding me after all these years, are you 139 00:08:30,489 --> 00:08:33,789 Suze: telling me? You have just now realized that's what the 140 00:08:34,349 --> 00:08:35,130 Suze: come on... 141 00:08:35,140 --> 00:08:40,770 KT: Women and Money podcast? Ask Suze, ok. Ask Suze Podcast. 142 00:08:41,590 --> 00:08:47,500 KT: You better tell them, don't listen to me. Tell them 143 00:08:47,510 --> 00:08:48,440 KT: one time. 144 00:08:49,200 --> 00:08:56,950 Suze: Ask Suze Suze Podcast at gmail.com. Send it in there 145 00:08:56,960 --> 00:08:59,429 Suze: or you can go to the Women and Money 146 00:08:59,525 --> 00:09:02,414 Suze: app and there is a place there to send in 147 00:09:02,424 --> 00:09:04,875 Suze: a question. And also if you happen to ask a 148 00:09:04,885 --> 00:09:08,775 Suze: question on the wall in the women and Money app, 149 00:09:08,784 --> 00:09:11,854 Suze: KT tends to scroll through those and maybe she'll take 150 00:09:11,864 --> 00:09:15,585 Suze: it from there and we will answer it as well. 151 00:09:15,594 --> 00:09:17,585 KT: Ok. Next question is from Kim. 152 00:09:18,030 --> 00:09:23,468 KT: Hi Suze. I'm 53 years old and engaged. Hm. My 153 00:09:23,479 --> 00:09:28,260 KT: fiance was burned financially by an ex wife and is 154 00:09:28,270 --> 00:09:32,330 KT: asking me for a prenup. His main concern is that 155 00:09:32,340 --> 00:09:36,270 KT: he doesn't want to pay me alimony ever. If we 156 00:09:36,280 --> 00:09:37,890 KT: were to get a divorce, 157 00:09:38,460 --> 00:09:42,400 KT: that's romantic, right, Suze? He makes almost three times as 158 00:09:42,409 --> 00:09:46,409 KT: much as me. He is, he is a bit concerned with, 159 00:09:46,419 --> 00:09:49,479 KT: this is honest. He's a bit concerned with putting two 160 00:09:49,489 --> 00:09:54,840 KT: kids through college and also saving for retirement. And then 161 00:09:54,909 --> 00:09:57,799 KT: Kim goes on to say my kids are grown and married. 162 00:09:58,309 --> 00:10:02,169 KT: He wants a joint account when we're married. I asked 163 00:10:02,179 --> 00:10:05,849 KT: for separate accounts for both of us. He's, he agreed. 164 00:10:05,859 --> 00:10:10,079 KT: He said, ok, we would both put 10 to 15% 165 00:10:10,090 --> 00:10:13,369 KT: in based on our income and that would be our 166 00:10:13,380 --> 00:10:18,390 KT: personal account. But Suze, this whole prenup and no alimony 167 00:10:18,400 --> 00:10:22,348 KT: is getting to me. I just don't know. So can 168 00:10:22,359 --> 00:10:27,689 KT: I just say something, Kim has doubt. What should she do? 169 00:10:29,330 --> 00:10:31,270 KT: Tell everyone your first thought, 170 00:10:31,280 --> 00:10:33,830 Suze: Tell everybody what my face looks like right now. 171 00:10:33,840 --> 00:10:35,710 KT: I know what her face looks like. 172 00:10:35,719 --> 00:10:36,890 Suze: Why don't you tell everybody 173 00:10:36,900 --> 00:10:39,460 KT: Don't marry him. Don't get married, Kim. 174 00:10:39,659 --> 00:10:44,270 Suze: Kim, here's the problem. I get that he was burned 175 00:10:44,609 --> 00:10:46,989 Suze: financially by an ex-wife. 176 00:10:48,119 --> 00:10:54,250 Suze: Kim. I was burned by an ex as well. Girlfriend, girlfriend. Right? 177 00:10:54,260 --> 00:10:58,099 Suze: She wasn't even my wife, spouse, right? And I got 178 00:10:58,109 --> 00:11:02,979 Suze: burned by her big time. Right. However, that did not 179 00:11:02,989 --> 00:11:07,859 Suze: affect how I felt when I met KT, 180 00:11:08,369 --> 00:11:13,619 Suze: when I met KT, I wanted to make sure that absolutely, 181 00:11:13,630 --> 00:11:18,799 Suze: she was 100% protected and I still feel that same 182 00:11:18,809 --> 00:11:21,109 Suze: way to this day. 183 00:11:21,750 --> 00:11:28,369 Suze: So I just always get like does past experience mean 184 00:11:28,559 --> 00:11:32,140 Suze: that the future that I want to create with somebody 185 00:11:32,409 --> 00:11:37,010 Suze: is somehow tied to the past if that just made 186 00:11:37,020 --> 00:11:40,449 Suze: any sense. So here's a few things that you need 187 00:11:40,460 --> 00:11:44,010 Suze: to know. Number one, you could do a prenup 188 00:11:44,440 --> 00:11:47,510 Suze: where he puts in that he doesn't want to pay 189 00:11:47,520 --> 00:11:51,270 Suze: you alimony. But what you need to know is that 190 00:11:51,280 --> 00:11:58,219 Suze: if these documents are not drawn up incredibly accurately with 191 00:11:58,229 --> 00:12:00,780 Suze: a family law attorney, 192 00:12:01,479 --> 00:12:04,559 Suze: then it is possible or probable that if you ever 193 00:12:04,570 --> 00:12:09,760 Suze: did get divorced and it went to a judge depending 194 00:12:09,770 --> 00:12:12,849 Suze: on the jurisdiction where you're doing this and everything. It 195 00:12:12,859 --> 00:12:16,479 Suze: is very possible that the judge would just throw it out. 196 00:12:16,989 --> 00:12:20,599 Suze: It would depend on your financial situation at the time. 197 00:12:20,609 --> 00:12:23,679 Suze: What's going on in your life at the time. So 198 00:12:23,690 --> 00:12:29,020 Suze: it may be that it won't even stand up in court. However, 199 00:12:29,669 --> 00:12:33,989 Suze: if this whole prenup and no alimony is getting to me, 200 00:12:34,000 --> 00:12:38,319 Suze: that is a quote from you. You said, I just 201 00:12:38,330 --> 00:12:43,169 Suze: don't know what is one of the major laws of money. 202 00:12:44,419 --> 00:12:48,650 Suze: It is better to do nothing than something you do 203 00:12:48,659 --> 00:12:53,469 Suze: not understand and not knowing something is something that you 204 00:12:53,479 --> 00:12:57,989 Suze: don't understand and it just doesn't feel right for you. 205 00:12:58,429 --> 00:13:01,209 Suze: So the truth of the matter is why even bother 206 00:13:01,219 --> 00:13:05,650 Suze: getting married, truthfully, just live together, have a great life. 207 00:13:05,659 --> 00:13:08,619 Suze: You keep all your money separate, let him keep all 208 00:13:08,630 --> 00:13:12,209 Suze: his money separate. However, if you're together and he's making 209 00:13:12,219 --> 00:13:15,090 Suze: three times the amount of money as you, he should 210 00:13:15,099 --> 00:13:17,968 Suze: be paying for everything every time you go out every 211 00:13:17,979 --> 00:13:21,400 Suze: time you do everything, let him pay for it, he 212 00:13:21,409 --> 00:13:22,488 Suze: can afford it. 213 00:13:22,849 --> 00:13:26,390 Suze: But there's something about this that I just don't like. 214 00:13:26,400 --> 00:13:31,549 Suze: Now I understand it from his point of view. But again, 215 00:13:31,559 --> 00:13:33,630 Suze: I'm just going to say I have a hard time 216 00:13:33,640 --> 00:13:37,739 Suze: when the past is affecting the future that he wants 217 00:13:37,750 --> 00:13:40,848 Suze: to create. I want you to be with somebody who 218 00:13:40,859 --> 00:13:44,429 Suze: cares enough about you that if you need something after 219 00:13:44,440 --> 00:13:47,419 Suze: you've gotten divorced, that it will be there for you. 220 00:13:47,859 --> 00:13:50,840 Suze: That when he is in a state of love, he 221 00:13:50,849 --> 00:13:53,799 Suze: wants to take care of you. He's already saying you 222 00:13:53,809 --> 00:13:57,760 Suze: can't have this or that. If in fact, we get divorced, 223 00:13:58,059 --> 00:14:01,760 Suze: I don't like it. And you know what? Neither do you? 224 00:14:02,700 --> 00:14:06,840 Suze: All right, KT, you know what she could do? Right. 225 00:14:06,950 --> 00:14:10,679 Suze: Here's a little secret. Why not? Secret. Right. So, for 226 00:14:10,690 --> 00:14:14,598 Suze: the prenup in most cases, to be absolutely legal, 227 00:14:15,469 --> 00:14:18,820 Suze: she has to have her own attorney, he has to 228 00:14:18,830 --> 00:14:23,780 Suze: have his own attorney. If she just signed whatever it 229 00:14:23,789 --> 00:14:27,619 Suze: was that was created by his attorney, she didn't really 230 00:14:27,630 --> 00:14:30,750 Suze: read it, she just signed it. She didn't even look 231 00:14:30,760 --> 00:14:31,320 Suze: at it. 232 00:14:31,950 --> 00:14:35,239 Suze: Chances are, it won't hold up just so, you know, 233 00:14:35,559 --> 00:14:38,409 Suze: and usually a prenup has to be changed by each 234 00:14:38,419 --> 00:14:42,650 Suze: party because the judge most likely will ask. Well, did 235 00:14:42,659 --> 00:14:45,090 Suze: you look at this? Did you know what you were signing? 236 00:14:45,099 --> 00:14:47,049 Suze: Did you do it on the way to the altar? 237 00:14:47,059 --> 00:14:51,989 Suze: Were you under pressure to do? So, all those questions 238 00:14:52,000 --> 00:14:56,270 Suze: will be asked. And so there's always a way, but 239 00:14:56,280 --> 00:14:56,809 Suze: then 240 00:14:57,270 --> 00:14:59,940 Suze: it's not a very nice thing to be living with. 241 00:15:00,190 --> 00:15:04,799 Suze: Do you like prenups? You're a believer in Susie really likes, 242 00:15:05,119 --> 00:15:07,549 Suze: I like prenups because you should plan for the what 243 00:15:07,559 --> 00:15:10,770 Suze: ifs like I said, when you're in a state of love, 244 00:15:10,780 --> 00:15:13,900 Suze: not when you are in a state of hate and 245 00:15:13,909 --> 00:15:18,520 Suze: given that one out of two marriages end up in divorce. 246 00:15:18,530 --> 00:15:22,640 Suze: The number one reason for divorce is arguments over money. 247 00:15:22,940 --> 00:15:27,880 Suze: You decided why you absolutely love one another. KT knows 248 00:15:27,890 --> 00:15:34,039 Suze: exactly what KT will get if I was ever stupid enough. Right? 249 00:15:34,049 --> 00:15:36,830 Suze: She knows which house is hers, the things that are 250 00:15:36,840 --> 00:15:40,840 Suze: in her individual name, she knows her income continues because 251 00:15:40,849 --> 00:15:44,799 Suze: the contracts that we have with everybody, they pay her directly. 252 00:15:44,809 --> 00:15:47,340 Suze: It doesn't have to go through me. So I have 253 00:15:47,349 --> 00:15:51,479 Suze: so taken care of her. Now, why did I do that? 254 00:15:51,979 --> 00:15:55,169 KT: Because she loves, I love her so much. Suze gets 255 00:15:55,179 --> 00:15:55,719 KT: the boat. 256 00:15:57,900 --> 00:16:01,479 Suze: That's about it. Everybody, she gets the island, she gets 257 00:16:01,489 --> 00:16:06,010 Suze: everything on this island and you have no idea how 258 00:16:06,020 --> 00:16:09,849 Suze: valuable that is. But if she wants it, she can 259 00:16:09,859 --> 00:16:12,770 Suze: have it. So she didn't even ask for it. 260 00:16:13,119 --> 00:16:14,109 KT: No, I didn't. 261 00:16:14,260 --> 00:16:18,690 Suze: But I want her to be fine no matter what. 262 00:16:18,700 --> 00:16:19,549 KT: Where's my quizzy? 263 00:16:20,484 --> 00:16:24,054 Suze: I have a quizzy. I have had a quizzy for you. 264 00:16:24,234 --> 00:16:25,224 Suze: I had a little bit.. 265 00:16:25,395 --> 00:16:30,224 KT: So Suze wanted to eliminate quizzies everybody but I said no, 266 00:16:30,234 --> 00:16:33,304 KT: don't do it. They love it. Right. Do you, do 267 00:16:33,315 --> 00:16:34,924 KT: you all like the quizzies? Yes. 268 00:16:34,934 --> 00:16:37,494 Suze: They like them. But you weren't liking them, were you? 269 00:16:37,635 --> 00:16:40,114 KT: No, I'd never get them. Right. But sometimes they get 270 00:16:40,125 --> 00:16:42,135 KT: it right. Let's see if I can get this one. Right. 271 00:16:42,614 --> 00:16:45,434 KT: All right. But I like the game, the game. Yeah, 272 00:16:45,445 --> 00:16:48,784 KT: I do. I like trying to get it. Right. Right. 273 00:16:48,794 --> 00:16:49,174 Suze: Then 274 00:16:49,440 --> 00:16:55,559 Suze: this one is from Sandra. Good afternoon, Suze. I have 275 00:16:55,570 --> 00:17:00,140 Suze: a question. Is it a good time to apply for 276 00:17:00,150 --> 00:17:04,650 Suze: a home equity loan? I want to pay for my 277 00:17:04,660 --> 00:17:07,459 Suze: daughter's education with this loan. 278 00:17:07,939 --> 00:17:11,680 Suze: The equity loan will be for my second home in Florida, 279 00:17:11,729 --> 00:17:16,119 Suze: which is already paid for. Thank you so much. So 280 00:17:16,130 --> 00:17:21,619 Suze: to make that clear, Sandra is simply asking right, she 281 00:17:21,630 --> 00:17:24,599 Suze: wants to pay for her daughter's college education. 282 00:17:25,390 --> 00:17:27,728 Suze: All right, everybody think about this because you need to 283 00:17:27,739 --> 00:17:30,560 Suze: know how to answer this question. That's why this is 284 00:17:30,569 --> 00:17:34,170 Suze: a quizzy for all of you. Sandra wants to pay 285 00:17:34,180 --> 00:17:36,810 Suze: for her daughter's college education 286 00:17:37,270 --> 00:17:40,030 Suze: and the way that she wants to pay for it 287 00:17:40,239 --> 00:17:44,569 Suze: is by taking out either an equity loan or home 288 00:17:44,579 --> 00:17:49,170 Suze: equity line of credit. Either one doesn't matter on her 289 00:17:49,180 --> 00:17:54,209 Suze: second home that she owns in Florida that is currently 290 00:17:54,219 --> 00:17:58,139 Suze: paid for. So rather than taking out student loans or 291 00:17:58,150 --> 00:18:01,369 Suze: other things like that, she wants to take out the 292 00:18:01,380 --> 00:18:04,770 Suze: equity in her second home, 293 00:18:05,150 --> 00:18:07,699 Suze: should she or shouldn't she? 294 00:18:08,060 --> 00:18:09,510 KT: I don't think she should. 295 00:18:09,910 --> 00:18:11,050 Suze: And why is that? 296 00:18:11,060 --> 00:18:15,489 KT: Because I think there's probably better ways to get the 297 00:18:15,500 --> 00:18:18,670 KT: money to pay for the daughter's college. And why wouldn't 298 00:18:18,680 --> 00:18:19,250 KT: she 299 00:18:19,689 --> 00:18:23,669 KT: consider doing some kind of a student loan with her daughter? 300 00:18:23,680 --> 00:18:28,449 Suze: Because student loans aren't dischargeable in bankruptcy. Maybe she's a 301 00:18:28,459 --> 00:18:31,900 Suze: mother that just is so protective of her daughter. She 302 00:18:31,910 --> 00:18:35,869 Suze: just doesn't want her daughter to have to worry about anything. 303 00:18:36,290 --> 00:18:39,619 Suze: It's a second home. She feels like, ok, it's already 304 00:18:39,630 --> 00:18:43,109 Suze: paid for, I'll just take out 100 or 200,000, whatever 305 00:18:43,119 --> 00:18:46,669 Suze: it is from there and pay it off monthly. What's 306 00:18:46,680 --> 00:18:47,630 Suze: that look for? 307 00:18:49,180 --> 00:18:51,880 KT: Is that like the best way to get the money... 308 00:18:51,969 --> 00:18:55,060 Suze: The question is should she or should she? 309 00:18:55,099 --> 00:18:57,319 KT: No, I don't like that idea. 310 00:18:57,619 --> 00:18:59,560 Suze: But you have to know why. My love. 311 00:18:59,569 --> 00:19:02,449 KT: Ok. I don't really know why, but it seems like 312 00:19:02,459 --> 00:19:06,109 KT: if you have a house that's paid for and you 313 00:19:06,119 --> 00:19:09,410 KT: don't have to, you know, owe any more mortgage or 314 00:19:09,420 --> 00:19:12,760 KT: money on the home, why would you start there? I 315 00:19:12,770 --> 00:19:14,919 KT: just go get a bank loan or something, 316 00:19:15,540 --> 00:19:17,859 Suze: But you definitely won't do it that way. 317 00:19:17,890 --> 00:19:20,349 KT: I don't think I would do it that way at all. 318 00:19:20,359 --> 00:19:21,800 Suze: You think... or, you know. 319 00:19:21,810 --> 00:19:23,160 KT: I wouldn't do it. 320 00:19:23,170 --> 00:19:34,169 Suze: Ding ding ding ding! Yeah, she loves the quizzies again. Everybody listen to me. 321 00:19:34,180 --> 00:19:35,629 Suze: My dearest Sandra 322 00:19:36,609 --> 00:19:41,800 Suze: right now, home equity lines of credit or home equity 323 00:19:41,810 --> 00:19:46,800 Suze: loans are sky high in interest rates. Ok. 324 00:19:47,729 --> 00:19:51,119 Suze: And if it's a home equity line of credit, for instance, 325 00:19:51,180 --> 00:19:54,750 Suze: and now you've taken it out and interest rates continue 326 00:19:54,760 --> 00:19:58,270 Suze: to go up, then your interest rate will go up 327 00:19:58,280 --> 00:20:01,989 Suze: as well, but even a home equity loan is going 328 00:20:02,000 --> 00:20:06,709 Suze: to be at 6.5 7 7.5% or more, maybe even 329 00:20:06,719 --> 00:20:11,770 Suze: higher because it is your second home. That is number one. 330 00:20:12,119 --> 00:20:14,540 Suze: You are in Florida, 331 00:20:15,479 --> 00:20:20,959 Suze: Florida. And that is where KT and I primarily live 332 00:20:21,400 --> 00:20:27,239 Suze: the home of Hurricaneville and all of a sudden you 333 00:20:27,250 --> 00:20:28,589 Suze: have this home 334 00:20:29,250 --> 00:20:33,709 Suze: that now is absolutely destroyed by a hurricane. It is 335 00:20:33,719 --> 00:20:38,540 Suze: no longer there, but yet you still owe that money 336 00:20:38,550 --> 00:20:42,349 Suze: to the bank even though that home has gone away. 337 00:20:42,359 --> 00:20:48,270 Suze: Does your insurance cover it? You better check that out? Also, 338 00:20:48,589 --> 00:20:53,790 Suze: something happens to you and obviously you don't have enough 339 00:20:53,800 --> 00:20:55,089 Suze: liquid cash 340 00:20:55,680 --> 00:20:59,609 Suze: to just pay for your daughter's college education because otherwise 341 00:20:59,619 --> 00:21:03,280 Suze: you would be doing that right now versus taking out 342 00:21:03,290 --> 00:21:08,359 Suze: an equity loan on a home that's already paid for. Now, 343 00:21:08,369 --> 00:21:11,739 Suze: something happens to you. Who knows what that is? You 344 00:21:11,750 --> 00:21:14,599 Suze: get injured, you get sick. I don't know how old 345 00:21:14,609 --> 00:21:16,728 Suze: you are, but you're not that old if your daughter's 346 00:21:16,739 --> 00:21:18,438 Suze: now just going to college 347 00:21:19,020 --> 00:21:24,329 Suze: and now you can't afford to pay back the equity 348 00:21:24,339 --> 00:21:28,430 Suze: loan that is now a secured loan, you could end 349 00:21:28,439 --> 00:21:33,829 Suze: up losing that house. Would you be better off taking 350 00:21:33,839 --> 00:21:37,459 Suze: out a parent plus loan to pay for your daughter's 351 00:21:37,469 --> 00:21:42,000 Suze: college education? Yeah, you would then an equity loan. However, 352 00:21:42,849 --> 00:21:49,449 Suze: why are you paying for your daughter's college education when 353 00:21:49,459 --> 00:21:54,389 Suze: you obviously don't have the money to do. So what 354 00:21:54,400 --> 00:21:59,698 Suze: is the lesson that you are passing down to your daughter? 355 00:22:00,170 --> 00:22:03,198 Suze: First of all, your daughter should be going to a 356 00:22:03,209 --> 00:22:05,890 Suze: college that she can afford. 357 00:22:06,329 --> 00:22:10,719 Suze: Number one. Number two, your daughter should be applying for 358 00:22:10,729 --> 00:22:14,750 Suze: her own loans and see how much she can get 359 00:22:14,760 --> 00:22:18,670 Suze: on that and if there isn't enough to cover it, 360 00:22:18,680 --> 00:22:23,050 Suze: then maybe you can step in. However, maybe if there's 361 00:22:23,060 --> 00:22:24,189 Suze: not enough money, 362 00:22:24,569 --> 00:22:29,709 Suze: your daughter should consider a community college. No, on every 363 00:22:29,719 --> 00:22:33,910 Suze: single level, you should not be doing what you are 364 00:22:33,920 --> 00:22:36,909 Suze: thinking about doing. And if you really want to give 365 00:22:36,920 --> 00:22:42,140 Suze: your daughter an education that will make her a seriously 366 00:22:42,150 --> 00:22:44,750 Suze: successful woman in life, 367 00:22:45,380 --> 00:22:48,910 Suze: teach her how to do things her own and gifts 368 00:22:48,920 --> 00:22:51,709 Suze: like that should just not come her way when it 369 00:22:51,719 --> 00:22:55,688 Suze: could cause hardship on her mother. 370 00:22:56,530 --> 00:22:57,650 Suze: Ok, KT. 371 00:22:57,680 --> 00:23:00,738 KT: I was waiting for that. Susie is a big believer 372 00:23:00,750 --> 00:23:04,930 KT: in financing college by the student. That's a big lesson 373 00:23:04,939 --> 00:23:06,030 KT: in finances. 374 00:23:06,040 --> 00:23:07,189 Suze: You know, it just is.. 375 00:23:07,199 --> 00:23:09,510 KT: It helps them really learn quick. 376 00:23:09,520 --> 00:23:13,280 Suze: And understand the value of money and not live in 377 00:23:13,290 --> 00:23:18,859 Suze: this world of where. Now the daughter grows up has 378 00:23:18,869 --> 00:23:22,949 Suze: a child. Now the daughter isn't in a very good 379 00:23:22,959 --> 00:23:24,468 Suze: financial situation 380 00:23:24,719 --> 00:23:28,698 Suze: and now we have a guilt syndrome coming up. Well, 381 00:23:28,709 --> 00:23:32,119 Suze: my mother put me through college, I need to put 382 00:23:32,130 --> 00:23:35,859 Suze: my child through college at all expense. And no, that's 383 00:23:35,869 --> 00:23:36,500 Suze: not true. 384 00:23:36,979 --> 00:23:39,459 Suze: I don't know of one loan that will help you 385 00:23:39,469 --> 00:23:43,020 Suze: through retirement. There are plenty of ways to go to 386 00:23:43,030 --> 00:23:46,790 Suze: college and have the student get a loan and, or 387 00:23:46,800 --> 00:23:48,790 Suze: a community college. Alright KT... 388 00:23:50,770 --> 00:23:54,680 KT: Today, Wherever I go, I will create 389 00:23:55,369 --> 00:24:02,550 KT: a more peaceful, joyful and loving world with you. 390 00:24:03,040 --> 00:24:07,380 Suze: All right. Everybody. If you do that, I promise you. 391 00:24:07,599 --> 00:24:12,670 Suze: If you say it as well, you will be unstoppable.