1 00:00:00,109 --> 00:00:04,099 Intro/Outro: All right, Suzie KT. Are you ready for today's podcast? Yeah, 2 00:00:04,690 --> 00:00:10,299 Intro/Outro: of course, we're ready because we are unstoppable. Yeah, baby 3 00:00:12,600 --> 00:00:12,639 Intro/Outro: Music In. 4 00:00:33,450 --> 00:00:40,110 Suze: August 31st 2023. Welcome everybody to the Women and Money podcast. 5 00:00:42,000 --> 00:00:42,918 KT: And everyone smart enough to listen. 6 00:00:43,630 --> 00:00:48,168 Suze: Right. This is the Ask KT and Suze edition. However, 7 00:00:48,180 --> 00:00:50,049 Suze: before we begin, 8 00:00:50,389 --> 00:00:54,020 Suze: first of all, as you know, we're in Florida right now. 9 00:00:54,029 --> 00:00:55,240 KT: It's the season... 10 00:00:55,299 --> 00:00:58,959 Suze: and we are safe and sound. We're not even close 11 00:00:58,970 --> 00:01:03,689 Suze: to where the hurricane hit. However, our hearts and our 12 00:01:03,700 --> 00:01:08,989 Suze: prayers go out to everybody. It is not easy with 13 00:01:09,000 --> 00:01:13,378 Suze: these hurricanes. So all we can do is send prayers 14 00:01:13,389 --> 00:01:15,000 Suze: and hope everybody 15 00:01:15,300 --> 00:01:20,309 Suze: is as safe and sound as possible. However... 16 00:01:20,319 --> 00:01:23,988 KT: Wait on a lighter note, on a slightly lighter note. 17 00:01:24,290 --> 00:01:27,470 KT: It's my baby brother, chris' birthday today. 18 00:01:27,480 --> 00:01:28,518 Suze: How old is he? 19 00:01:28,529 --> 00:01:31,910 KT: 70? I don't want to say he's 70 because I 20 00:01:31,919 --> 00:01:33,819 KT: just said my baby brother, 21 00:01:35,279 --> 00:01:39,120 KT: he's 70 years old. And Chris, we wish you the 22 00:01:39,129 --> 00:01:43,569 KT: most wonderful, wonderful new decade ahead and we hope it's as, 23 00:01:43,580 --> 00:01:46,779 KT: as exciting as mine and Suze's 24 00:01:47,040 --> 00:01:50,589 Suze: happens to be as I said you are listening to 25 00:01:50,599 --> 00:01:51,610 Suze: the Ask KT 26 00:01:51,709 --> 00:01:56,540 Suze: and Suze anything addition. And if you want, what do 27 00:01:56,550 --> 00:01:57,339 Suze: they need to do KT? 28 00:01:58,410 --> 00:02:02,169 KT: You need to send an email or message to 29 00:02:02,180 --> 00:02:06,440 Suze: Ask Suze podcast at gmail dot com. And that is 30 00:02:06,449 --> 00:02:08,199 Suze: where you send in your question. 31 00:02:08,449 --> 00:02:11,979 Suze: And if KT likes it, or can relate to it. 32 00:02:12,029 --> 00:02:15,940 Suze: She picks it and we answer it here on the podcast. 33 00:02:15,949 --> 00:02:18,520 KT: Keep them short, keep them short, everybody. 34 00:02:18,529 --> 00:02:19,750 Suze: Keep them short, 35 00:02:20,229 --> 00:02:23,000 KT: short and sweet and I'll be for sure. I'll pick 36 00:02:23,008 --> 00:02:23,918 KT: them short and sweet. 37 00:02:24,020 --> 00:02:25,949 Suze: All right, KT. Are you ready to begin? 38 00:02:25,960 --> 00:02:30,410 KT: I am. Here's your first question, Suze. Do we really 39 00:02:30,419 --> 00:02:34,978 KT: need revocable trust? This is from Michael and Michael said 40 00:02:34,990 --> 00:02:37,490 KT: he's from Seattle and he's one of those who is 41 00:02:37,500 --> 00:02:41,889 KT: smart enough to listen. So Michael says, let me explain. 42 00:02:42,279 --> 00:02:45,970 KT: My partner is 69. I am 54. We are not 43 00:02:45,979 --> 00:02:51,038 KT: married but have been together for 22 wonderful years. It's 44 00:02:51,050 --> 00:02:54,309 KT: like you and me, Suze. We each have all our 45 00:02:54,320 --> 00:02:58,929 KT: investments and beneficiary accounts to each other and we hold 46 00:02:58,940 --> 00:03:01,669 KT: title to our jointly owned condo which is 47 00:03:01,755 --> 00:03:05,884 KT: fully paid off with rights of survivorship. We have no debt. 48 00:03:05,975 --> 00:03:10,445 KT: We both also have wills financial power of attorney and 49 00:03:10,455 --> 00:03:14,053 KT: durable power of attorney for health care in place in 50 00:03:14,065 --> 00:03:19,615 KT: our situation, Suze are revocable trust necessary. And if so 51 00:03:19,625 --> 00:03:23,125 KT: what would that benefit be? Thanks for all you do. 52 00:03:27,288 --> 00:03:31,690 Suze: So, Miguel, I'm practicing my Spanish already now. So Michael really, I 53 00:03:31,699 --> 00:03:37,000 Suze: understand exactly why you would think that you don't need 54 00:03:37,410 --> 00:03:42,380 Suze: a revocable trust. However, one of the reasons is you 55 00:03:42,389 --> 00:03:45,699 Suze: say you have financial powers of attorney, 56 00:03:46,330 --> 00:03:50,970 Suze: depending on the financial power of attorney that you have 57 00:03:51,330 --> 00:03:56,419 Suze: many financial powers of attorney become null and void the 58 00:03:56,429 --> 00:04:01,520 Suze: day that there's an incapacity because the banks and the 59 00:04:01,529 --> 00:04:05,179 Suze: brokerage firms and the places that they would be used, 60 00:04:05,190 --> 00:04:10,619 Suze: they don't know. Are they still valid? Did you revoke 61 00:04:10,630 --> 00:04:14,199 Suze: the financial power of attorney? And yet he still has 62 00:04:14,210 --> 00:04:15,279 Suze: a copy of it. 63 00:04:15,550 --> 00:04:19,368 Suze: So it becomes very difficult at times when they are really, 64 00:04:19,380 --> 00:04:20,518 Suze: really needed. 65 00:04:21,410 --> 00:04:26,359 Suze: In case of an incapacity being you become incapacitated and 66 00:04:26,369 --> 00:04:29,488 Suze: then your partner would have to sign for you. But 67 00:04:29,500 --> 00:04:31,868 Suze: what if the banks say we don't know that this 68 00:04:31,880 --> 00:04:35,409 Suze: financial power of attorney is valid? Then what do you do? 69 00:04:35,890 --> 00:04:39,899 Suze: And don't think that can't happen because it can, it 70 00:04:39,910 --> 00:04:44,529 Suze: is far easier if you have a living revocable trust 71 00:04:45,070 --> 00:04:50,149 Suze: and within the trust, it has an incapacity clause which 72 00:04:50,160 --> 00:04:55,238 Suze: names your partner as the person who has that financial power. 73 00:04:56,000 --> 00:05:00,250 Suze: If something happens to you and your partner who then 74 00:05:00,260 --> 00:05:04,299 Suze: pays your bills, who then writes your checks. Did you 75 00:05:04,309 --> 00:05:06,730 Suze: do a financial power of attorney that goes all the 76 00:05:06,738 --> 00:05:12,160 Suze: way down for successor people, successor trustees to do that? 77 00:05:12,359 --> 00:05:15,970 Suze: Probably you have not when you open up a trust 78 00:05:15,980 --> 00:05:18,010 Suze: account at a bank, for instance, 79 00:05:18,750 --> 00:05:22,040 Suze: you have to usually give them a copy of your trust. 80 00:05:22,540 --> 00:05:26,669 Suze: So they already have it on file. If you were 81 00:05:26,678 --> 00:05:29,579 Suze: going to change your trust, you probably would have had 82 00:05:29,589 --> 00:05:32,738 Suze: to give them a, the change of the trust. 83 00:05:33,369 --> 00:05:34,979 Suze: And so therefore 84 00:05:35,709 --> 00:05:41,260 Suze: you would be far better protected for incapacities, you would 85 00:05:41,269 --> 00:05:44,920 Suze: be far better protected if something happens to both of 86 00:05:44,928 --> 00:05:48,480 Suze: you at once, because if something happens to both of 87 00:05:48,488 --> 00:05:53,659 Suze: you at once and you only have your home in joint tenancy 88 00:05:53,670 --> 00:05:56,380 Suze: with right of survivorship. And now the two of you 89 00:05:56,390 --> 00:05:59,920 Suze: seriously are killed in a car crash together. Don't think 90 00:05:59,928 --> 00:06:04,500 Suze: it can't happen. Michael, don't think it can't happen. 91 00:06:05,420 --> 00:06:08,459 Suze: Then the house is gonna have to go through probate. 92 00:06:08,720 --> 00:06:13,589 Suze: If you had a living revocable trust, it would designate 93 00:06:13,600 --> 00:06:18,719 Suze: who gets it. If you both die. If whatever happens, 94 00:06:18,730 --> 00:06:24,039 Suze: you could do contingency clauses in the trust. So I 95 00:06:24,049 --> 00:06:26,868 Suze: can't think of one downside, 96 00:06:27,350 --> 00:06:31,459 Suze: not one for you to have a revocable trust. I 97 00:06:31,470 --> 00:06:36,600 Suze: could think of 10 to 15 downsides for you not to. 98 00:06:36,760 --> 00:06:39,940 Suze: I hope that answered your question next question, KT. 99 00:06:40,709 --> 00:06:43,118 KT: So, Suze, this question is from Ariana, 100 00:06:43,450 --> 00:06:47,489 KT: I wanted to seek your advice regarding my retirement accounts. 101 00:06:47,750 --> 00:06:52,000 KT: I'm 39 years old. I'm considering the option of converting 102 00:06:52,010 --> 00:06:56,589 KT: a portion or all of my traditional 401k. She's got 103 00:06:56,600 --> 00:07:00,118 KT: about 275,000 from her previous 104 00:07:00,385 --> 00:07:04,234 KT: employer to a Roth. I'm seeking clarity on whether this 105 00:07:04,244 --> 00:07:06,584 KT: would be a wise choice or not. 106 00:07:06,595 --> 00:07:09,394 Suze: It would be the wisest choice you could ever make 107 00:07:09,404 --> 00:07:14,614 Suze: at the age of 39 because she has so many 108 00:07:14,625 --> 00:07:19,434 Suze: compounding years left KT until she's got at least 30 109 00:07:19,804 --> 00:07:22,595 Suze: or more until she's gonna want to take this money 110 00:07:22,605 --> 00:07:26,214 Suze: out if she even retires at that point in time. 111 00:07:26,450 --> 00:07:31,200 Suze: And rather than that money compounding and compounding tax wise, 112 00:07:31,209 --> 00:07:32,920 Suze: so that when she takes it out, she has to 113 00:07:32,929 --> 00:07:37,089 Suze: pay taxes on it, she could pay the taxes now, 114 00:07:37,100 --> 00:07:41,049 Suze: convert it over and let it grow. Absolutely tax free. 115 00:07:41,200 --> 00:07:44,500 Suze: What you have to do, Ariana is pay a visit 116 00:07:44,510 --> 00:07:48,970 Suze: to a CPA and decide how much per year should 117 00:07:48,980 --> 00:07:54,239 Suze: you convert to a Roth Ira? Absolutely. You should do it. 118 00:07:54,250 --> 00:07:56,239 Suze: Just do not do it all 119 00:07:56,334 --> 00:07:57,795 Suze: at once. All right. 120 00:07:57,864 --> 00:08:00,515 KT: Also, I didn't tell you this, but she's reading your 121 00:08:00,524 --> 00:08:04,445 KT: retirement for 50 plus. She's almost done with it. She 122 00:08:04,454 --> 00:08:07,315 KT: loves it and she's 39. Isn't that great? 123 00:08:07,804 --> 00:08:09,445 Suze: That is great. Great. 124 00:08:09,484 --> 00:08:13,885 KT: That's where she's learning this from. Ok. Next question from Carmen. 125 00:08:14,304 --> 00:08:20,774 KT: It's about a 30 year series EE Patriot Bond for $500. 126 00:08:21,220 --> 00:08:23,130 KT: I don't even know what that is, but it says 127 00:08:23,140 --> 00:08:27,679 KT: my children each received one from my grandfather when they 128 00:08:27,690 --> 00:08:31,149 KT: were born. I have the certificate which is written out 129 00:08:31,160 --> 00:08:35,250 KT: to each of my children and I am the or, 130 00:08:35,419 --> 00:08:39,049 KT: and the, or part only includes her social security number... 131 00:08:39,150 --> 00:08:40,570 Suze: because her kids are minors. Yeah. 132 00:08:41,500 --> 00:08:43,169 KT: I've never received or expected 133 00:08:43,400 --> 00:08:47,630 KT: annual interest. So Suze, the grandfather passed away more than 134 00:08:47,640 --> 00:08:50,650 KT: 10 years ago. They think that this matures at the 135 00:08:50,659 --> 00:08:54,239 KT: end of 30 years. But can you please enlighten them 136 00:08:54,250 --> 00:08:58,049 KT: into this type of bond? I, I don't know what 137 00:08:58,059 --> 00:09:00,239 KT: that is either an EE Patriot. 138 00:09:00,250 --> 00:09:05,929 Suze: Yeah. When September 11th happened KT, back in 2001, the 139 00:09:05,940 --> 00:09:12,820 Suze: government in all their wisdom decided to issue antiterrorism bonds 140 00:09:13,530 --> 00:09:17,750 Suze: and they were called Patriot Bonds. Now, double E bonds 141 00:09:17,760 --> 00:09:21,739 Suze: have been around forever. And normally somebody invests in a 142 00:09:21,750 --> 00:09:24,799 Suze: double E. It gives you a very low interest rate, 143 00:09:24,809 --> 00:09:29,020 Suze: but it's guaranteed to double whatever amount of money you 144 00:09:29,030 --> 00:09:33,218 Suze: put in in 20 years. So no matter what interest 145 00:09:33,229 --> 00:09:33,900 Suze: rates do, 146 00:09:34,440 --> 00:09:38,020 Suze: you're guaranteed to double your money in 20 years. And 147 00:09:38,030 --> 00:09:41,569 Suze: when you buy a double E Patriot Bond or a 148 00:09:41,580 --> 00:09:46,710 Suze: double E bond, because they stopped issuing them in 2011. 149 00:09:46,840 --> 00:09:55,289 Suze: So between December 2001 and 2011, they issued paper Patriot bonds, 150 00:09:55,299 --> 00:09:58,630 Suze: which is what we're talking about in this case. Now, 151 00:09:58,640 --> 00:10:01,510 Suze: you can still buy double E bonds if you want, 152 00:10:01,520 --> 00:10:03,390 Suze: but you have to do it online. 153 00:10:04,030 --> 00:10:08,880 Suze: But if she says that she has $500 each, 154 00:10:09,840 --> 00:10:17,319 Suze: that means that grandpa paid $250 for those bonds. And 155 00:10:17,330 --> 00:10:21,090 Suze: in 20 years from the date that he bought them, 156 00:10:21,270 --> 00:10:26,549 Suze: they would be worth $500. Now, I don't know when 157 00:10:26,559 --> 00:10:29,968 Suze: he bought them if he died 10 years ago 158 00:10:30,500 --> 00:10:35,169 Suze: and here we are 2023 and they stopped issuing them 159 00:10:35,179 --> 00:10:40,559 Suze: in 2011. The bond's probably at least 12 years old, 160 00:10:40,570 --> 00:10:44,289 Suze: but Carmen, what you have to do is you have 161 00:10:44,299 --> 00:10:49,869 Suze: to find out exactly how much they are worth. So 162 00:10:49,880 --> 00:10:53,270 Suze: you would go online to Treasury direct dot gov. 163 00:10:54,070 --> 00:10:58,250 Suze: And there's a little calculator for double E bonds on 164 00:10:58,260 --> 00:11:01,940 Suze: the face of your actual paper bond. There is like 165 00:11:01,950 --> 00:11:05,599 Suze: a number, a serial number you will put that in 166 00:11:05,609 --> 00:11:08,199 Suze: and you will find out the interest rate that they're 167 00:11:08,210 --> 00:11:12,960 Suze: currently paying and what they are currently worth. My advice 168 00:11:12,969 --> 00:11:16,218 Suze: to you would be, it is true. Double E bonds 169 00:11:16,229 --> 00:11:18,820 Suze: mature in 30 years. 170 00:11:19,390 --> 00:11:22,940 Suze: But in most cases, once they've gotten to the 20 171 00:11:22,950 --> 00:11:28,400 Suze: year maturity date, that is usually the time that people 172 00:11:28,409 --> 00:11:33,559 Suze: cash them in. Unless the current interest rate that this 173 00:11:33,570 --> 00:11:36,760 Suze: series double E bond is paying is higher than what 174 00:11:36,770 --> 00:11:41,179 Suze: you could get somewhere else. So that's your job. You 175 00:11:41,190 --> 00:11:42,280 Suze: have to know 176 00:11:42,619 --> 00:11:45,289 Suze: where you are, how old they are and what they're 177 00:11:45,299 --> 00:11:48,369 Suze: worth and make a decision there. But I think you 178 00:11:48,380 --> 00:11:51,799 Suze: would be far better off once they have reached 20 years, 179 00:11:51,809 --> 00:11:54,869 Suze: do not cash them in before that. Once they have 180 00:11:54,880 --> 00:11:58,929 Suze: reached at least 20 years, you probably would be better 181 00:11:58,940 --> 00:12:01,510 Suze: off at this point, cashing them in, 182 00:12:02,299 --> 00:12:08,299 Suze: you'll get $1000 in total $500 each for them at 183 00:12:08,309 --> 00:12:11,988 Suze: that time. And then you can invest that money for 184 00:12:12,000 --> 00:12:16,108 Suze: the kids probably in a far more profitable way. 185 00:12:16,950 --> 00:12:20,140 Suze: The key is gonna be. How does she cash them in? 186 00:12:20,150 --> 00:12:22,069 Suze: Does she take them to a bank? Will her bank 187 00:12:22,080 --> 00:12:24,830 Suze: accept them, KT or does she have to send them 188 00:12:24,840 --> 00:12:28,400 Suze: into Treasury direct dot gov to cash them in? But 189 00:12:28,409 --> 00:12:32,760 Suze: that's essentially what you need to know. They stopped making, 190 00:12:32,770 --> 00:12:36,820 Suze: like I said, paper bonds in 2012. 191 00:12:37,090 --> 00:12:38,880 KT: Can you still buy a paper bond? 192 00:12:39,659 --> 00:12:40,090 Suze: No, you don't. 193 00:12:40,429 --> 00:12:41,710 KT: You don't. Everything's online. 194 00:12:41,960 --> 00:12:46,429 Suze: That's why KT, that stack of series I bonds. You 195 00:12:46,460 --> 00:12:48,030 Suze: remember that stack? 196 00:12:48,979 --> 00:12:52,780 KT: Whoa, I do remember. And you used to say, don't 197 00:12:52,789 --> 00:12:56,729 KT: lose this if something happens to me, cash them in... 198 00:12:57,570 --> 00:13:00,250 Suze: Not necessarily cash them in, but just know here they 199 00:13:00,260 --> 00:13:03,429 Suze: are because they were worth a lot of money. However, 200 00:13:03,440 --> 00:13:05,080 Suze: I ended up sending 201 00:13:05,710 --> 00:13:09,949 Suze: all those bonds into treasury direct dot gov to be 202 00:13:09,960 --> 00:13:15,219 Suze: put into our online Treasury Direct account and the entire 203 00:13:15,229 --> 00:13:17,940 Suze: time because that was the only way to get them there. 204 00:13:17,950 --> 00:13:21,559 Suze: I was so nervous that something was going to happen. 205 00:13:21,570 --> 00:13:24,190 Suze: KT and they weren't gonna make it there, but that 206 00:13:24,200 --> 00:13:28,520 Suze: is the only way to do it. Next question, my love, 207 00:13:28,530 --> 00:13:30,119 Suze: Miss Kathy Travis. 208 00:13:30,130 --> 00:13:31,400 KT: This is from Beth. 209 00:13:31,799 --> 00:13:35,150 KT: Hi KT and Suze. I find both of your voices 210 00:13:35,159 --> 00:13:36,890 KT: to be so soothing. 211 00:13:37,280 --> 00:13:39,669 Suze: I find my voice a little froggy today. 212 00:13:39,679 --> 00:13:43,330 KT: Yeah. A little bit, a little horse. Savannah dust. 213 00:13:43,659 --> 00:13:44,450 Suze: Right. Yeah. Yeah. Yeah. 214 00:13:45,119 --> 00:13:47,108 Suze: So explain what that is. 215 00:13:47,119 --> 00:13:49,650 KT: Yeah. Let me explain what that is. So when we're 216 00:13:49,659 --> 00:13:52,289 KT: here in the Bahamas and in South Florida, during the 217 00:13:52,299 --> 00:13:56,819 KT: summer months, this dust travels in these very fine clouds 218 00:13:56,830 --> 00:14:00,150 KT: across the Atlantic, you don't notice it but it's actually 219 00:14:00,159 --> 00:14:02,130 KT: in the air and you can, 220 00:14:02,289 --> 00:14:03,608 KT: it can make your throat a little bit. 221 00:14:04,320 --> 00:14:05,989 Suze: I'm having a little trouble here this morning. 222 00:14:06,000 --> 00:14:09,169 KT: So this is from Beth. She wrote Pick Me KT. 223 00:14:09,929 --> 00:14:13,659 KT: So I did. But the question is one that Suze's 224 00:14:13,669 --> 00:14:16,530 KT: given this answer about a gazillion times, but I'm going 225 00:14:16,539 --> 00:14:19,400 KT: to read it anyway. Hi, KT and Suze. 226 00:14:19,710 --> 00:14:24,460 KT: I'm looking for a Suze school on 529 plans. Advantages, 227 00:14:24,469 --> 00:14:30,239 KT: disadvantages UGMAS advantages, disadvantages. I hear there is a new 228 00:14:30,250 --> 00:14:35,210 KT: rule to allow for 529s to transfer to Roth Iras 229 00:14:35,450 --> 00:14:39,479 KT: in the future for your kiddo. But does opening one 230 00:14:39,489 --> 00:14:44,359 KT: of these accounts also impact your ability to get financial aid. 231 00:14:44,369 --> 00:14:44,739 KT: So 232 00:14:44,950 --> 00:14:48,669 KT: Beth is for years old. Her daughter's one, right? 233 00:14:49,140 --> 00:14:52,049 Suze: So that's what, here's the truth. I did a big 234 00:14:52,059 --> 00:14:56,710 Suze: podcast on the Roth conversion just a few podcasts ago. 235 00:14:56,719 --> 00:14:58,580 Suze: So I need you to listen to that 236 00:14:58,840 --> 00:15:03,030 Suze: also to find out everything that you really need to know. 237 00:15:03,039 --> 00:15:07,559 Suze: Go to saving for college dot com. It's the absolute 238 00:15:07,570 --> 00:15:13,950 Suze: best website around to explain. 529 plans for you. 529 plans. 239 00:15:13,960 --> 00:15:15,250 Suze: Far better option 240 00:15:15,380 --> 00:15:20,739 Suze: then uniform gift to Minor Act accounts, however, go there 241 00:15:20,750 --> 00:15:23,169 Suze: and look it up and you'll find all the answers 242 00:15:23,179 --> 00:15:26,840 Suze: you need because I've answered this question so many times before. 243 00:15:26,849 --> 00:15:29,580 Suze: All right, or look in the past podcast, but it's 244 00:15:29,590 --> 00:15:32,789 Suze: easier to go to saving for college dot com. Ok. 245 00:15:32,799 --> 00:15:35,090 KT: Next question, Suze is from Fran 246 00:15:35,640 --> 00:15:38,549 KT: and, and I picked this because I don't ever want 247 00:15:38,559 --> 00:15:43,929 KT: any of you to think a question is dumb. Fran wrote, Suze, KT. 248 00:15:44,289 --> 00:15:48,169 KT: This may sound like a dumb question, but I'm going 249 00:15:48,179 --> 00:15:52,710 KT: to ask it anyway. When is dollar cost averaging 250 00:15:53,119 --> 00:15:57,520 KT: best to invest $400 once a month or should I 251 00:15:57,530 --> 00:16:02,059 KT: split the amount and invest $100 every week? 252 00:16:02,200 --> 00:16:06,789 Suze: It's funny that you picked this. Because everybody I go through 253 00:16:06,799 --> 00:16:10,669 Suze: and I do read every single email that you send in. 254 00:16:11,099 --> 00:16:15,190 Suze: However, KT gets to pick them and she doesn't know 255 00:16:15,200 --> 00:16:20,330 Suze: which questions I've answered already directly to the person I 256 00:16:20,340 --> 00:16:24,309 Suze: answered Fran directly. I said, first of all, there's no 257 00:16:24,320 --> 00:16:26,830 Suze: such thing as a dumb question, which is why I 258 00:16:26,840 --> 00:16:30,510 Suze: decided to answer her because I wanted her to feel valid. 259 00:16:30,609 --> 00:16:32,739 Suze: So I hope you're listening Fran because you know, I 260 00:16:32,750 --> 00:16:33,770 Suze: answered you. 261 00:16:34,049 --> 00:16:37,599 Suze: And the truth of the matter is when it comes 262 00:16:37,609 --> 00:16:42,030 Suze: to markets like this, I would be very flexible as 263 00:16:42,039 --> 00:16:45,000 Suze: to how I do dollar cost averaging. 264 00:16:45,239 --> 00:16:47,330 Suze: If you could do it every two weeks for at 265 00:16:47,340 --> 00:16:50,469 Suze: least a year, I wouldn't have a problem with that. 266 00:16:50,479 --> 00:16:53,940 Suze: Or once a month. But you would really look at 267 00:16:53,950 --> 00:16:59,080 Suze: and take advantage of the days within that month that, 268 00:16:59,090 --> 00:17:02,469 Suze: that stock has gone down a little bit or maybe 269 00:17:02,479 --> 00:17:05,829 Suze: the overall market is going down. So I just 270 00:17:05,925 --> 00:17:09,885 Suze: wouldn't set a date every single month and do it. 271 00:17:09,984 --> 00:17:14,694 Suze: I would, in this particular case, you can invest $400 272 00:17:14,704 --> 00:17:19,435 Suze: then do $100 or $200 every two weeks just to 273 00:17:19,444 --> 00:17:23,534 Suze: see and divide up where the markets are going. All right. 274 00:17:23,915 --> 00:17:28,324 KT: OK. Next question is from Judy and I, I like 275 00:17:28,334 --> 00:17:29,583 KT: this because it's a very... 276 00:17:29,655 --> 00:17:32,474 Suze: Do you think everybody knows what dollar cost averaging is? 277 00:17:33,290 --> 00:17:36,359 KT: Well, yeah, you've talked about it so many times. 278 00:17:36,369 --> 00:17:40,439 Suze: So tell everybody, you tell everybody since I've talked about 279 00:17:40,449 --> 00:17:41,599 Suze: it so many times 280 00:17:41,609 --> 00:17:44,459 KT: You take a set amount of money like Suze just said, 281 00:17:44,469 --> 00:17:47,900 KT: let's say it's $100 a week and you put it 282 00:17:47,910 --> 00:17:52,400 KT: into your favorite, you know, stock market fund 283 00:17:53,140 --> 00:17:55,349 KT: like you're 500. 284 00:17:55,359 --> 00:17:58,439 Suze: That's, that's, you're such a good teacher today. You should 285 00:17:58,449 --> 00:18:01,569 Suze: see her little face. So everybody just go... 286 00:18:03,939 --> 00:18:06,879 KT: So I think it's better to set it and forget it. 287 00:18:06,890 --> 00:18:10,109 KT: But if Suze said, if you're someone that watches and 288 00:18:10,119 --> 00:18:12,760 KT: is a should be a watcher, but if you, the 289 00:18:12,770 --> 00:18:14,750 KT: market is really tanking, 290 00:18:15,260 --> 00:18:18,709 Suze: Ok, nevermind. Here's the real answer to that question. Why do 291 00:18:18,719 --> 00:18:21,750 Suze: I even do this to myself? Ok. And to all 292 00:18:21,760 --> 00:18:22,369 Suze: of you, 293 00:18:22,839 --> 00:18:26,708 Suze: you decide on a specific amount of money. Maybe it's 294 00:18:26,739 --> 00:18:33,329 Suze: $1000 maybe it's $10,000 or $12,000 or $100,000 that you 295 00:18:33,339 --> 00:18:37,180 Suze: want to invest in the stock market, you then divide 296 00:18:37,189 --> 00:18:41,630 Suze: that amount of money by 12 or 24 297 00:18:42,199 --> 00:18:45,550 Suze: to decide. Do you want to invest it all within 298 00:18:45,560 --> 00:18:48,469 Suze: a year's period of time or two years, period of 299 00:18:48,479 --> 00:18:52,849 Suze: time or whatever length you want no less than one year. 300 00:18:53,280 --> 00:18:55,569 Suze: And then you take that amount of money 301 00:18:56,270 --> 00:18:59,760 Suze: that is for that month. So if it was $12,000 302 00:18:59,770 --> 00:19:02,389 Suze: and you did it for one year, you wanted it 303 00:19:02,400 --> 00:19:07,819 Suze: all invested within one year, you would take $1000 every 304 00:19:07,829 --> 00:19:11,260 Suze: month and invest it in whatever it is that you 305 00:19:11,270 --> 00:19:15,520 Suze: want to invest it in. Now, hopefully that would be diversified, 306 00:19:15,530 --> 00:19:19,300 Suze: whether it's in exchange traded funds or slices of many 307 00:19:19,310 --> 00:19:23,208 Suze: different stocks, but you could take that $1000 and do 308 00:19:23,219 --> 00:19:25,540 Suze: 250 a week if you wanted to 309 00:19:26,199 --> 00:19:29,770 Suze: and do it that way as well. So now since 310 00:19:29,780 --> 00:19:34,170 Suze: you can buy things without commission, you can do it 311 00:19:34,180 --> 00:19:37,329 Suze: in any way you want if you do it online, 312 00:19:37,550 --> 00:19:42,140 Suze: but your dollar cost average in the hopes that if 313 00:19:42,150 --> 00:19:45,589 Suze: the market goes down, your dollars 314 00:19:46,239 --> 00:19:49,869 Suze: average the price of what you're buying. So therefore you 315 00:19:49,880 --> 00:19:53,560 Suze: buy more shares. When the market goes down for that 316 00:19:53,569 --> 00:19:57,010 Suze: amount of money, you buy less shares when the market 317 00:19:57,020 --> 00:19:59,770 Suze: is going up for that exact same amount of money. 318 00:20:00,109 --> 00:20:04,349 Suze: But in the long run, you have averaged the cost 319 00:20:04,359 --> 00:20:09,810 Suze: of what you're investing in over time with your dollars. Now, 320 00:20:09,819 --> 00:20:10,910 Suze: you could have done that. 321 00:20:11,530 --> 00:20:15,810 KT: I did say that. Go to your favorite ETFs or... 322 00:20:16,239 --> 00:20:17,979 Suze: Never mind. Just ask me the next question. 323 00:20:17,989 --> 00:20:20,550 KT: This is from Judy. I, this is a very, a 324 00:20:20,579 --> 00:20:24,640 KT: very sweet question and I really love that Judy. Um, 325 00:20:24,650 --> 00:20:28,500 KT: put this in the subject, helping an elderly parent. We've 326 00:20:28,510 --> 00:20:33,079 KT: had this conversation many times. She said, Suze, I hope 327 00:20:33,089 --> 00:20:35,479 KT: you can help me navigate this situation. 328 00:20:35,900 --> 00:20:39,119 KT: My mom recently died leaving me in charge of the 329 00:20:39,130 --> 00:20:43,469 KT: finances for my 88 year old father who doesn't have 330 00:20:43,479 --> 00:20:47,579 KT: the skills or interest in doing this. So I just 331 00:20:47,589 --> 00:20:50,410 KT: want everyone to know that Judy's an only child. She 332 00:20:50,420 --> 00:20:53,069 KT: really wants to do the best thing for her dad. 333 00:20:53,160 --> 00:20:57,109 KT: So here's where it gets complicated. There are four checking 334 00:20:57,119 --> 00:21:00,910 KT: accounts and three savings accounts now held jointly between my 335 00:21:00,920 --> 00:21:03,369 KT: dad and me across three banks. 336 00:21:03,800 --> 00:21:06,869 KT: No money is invested outside of the banks like in 337 00:21:06,880 --> 00:21:10,430 KT: the stock market or whatever. He has a pension, he 338 00:21:10,439 --> 00:21:15,780 KT: gets annuity payments and he's got cash stashed in a 339 00:21:15,790 --> 00:21:21,270 KT: number of properties in envelopes, but significant sums of cash 340 00:21:21,280 --> 00:21:25,109 KT: like tens of thousands of dollars. So in total, we're 341 00:21:25,119 --> 00:21:27,708 KT: talking about $800,000. 342 00:21:28,010 --> 00:21:31,469 KT: And I think that what Judy's asking you, Suze is, 343 00:21:31,670 --> 00:21:34,560 KT: I'm an only child trying to do the best I can, 344 00:21:34,569 --> 00:21:37,439 KT: I love my dad and want to take really good 345 00:21:37,449 --> 00:21:38,619 KT: care of him. 346 00:21:38,920 --> 00:21:42,760 KT: He likes having the cash around. But what can she 347 00:21:42,770 --> 00:21:47,469 KT: do to help keep this safe and sound? And these accounts, 348 00:21:47,479 --> 00:21:50,449 KT: by the way, are earning like 1% interest... 349 00:21:50,459 --> 00:21:50,899 Suze: Or less... 350 00:21:51,050 --> 00:21:51,949 KT: Right? So what can she do? 351 00:21:52,400 --> 00:21:55,810 Suze: Here's what I want you to do. And again, our hearts really still 352 00:21:55,819 --> 00:21:59,000 Suze: go out to all the people who lost everything in 353 00:21:59,010 --> 00:22:02,810 Suze: Maui and all these storms that are here and around 354 00:22:02,819 --> 00:22:05,209 Suze: and things that can happen. I want you to sit 355 00:22:05,219 --> 00:22:06,750 Suze: down with your dad 356 00:22:07,479 --> 00:22:11,130 Suze: and I want you to say, dad, listen to me, 357 00:22:11,719 --> 00:22:15,160 Suze: you now know what's happened in Maui and all those 358 00:22:15,170 --> 00:22:21,159 Suze: homes in an entire town are gone. Imagine if the 359 00:22:21,170 --> 00:22:25,329 Suze: house or wherever he's keeping it burnt down, do you 360 00:22:25,339 --> 00:22:29,670 Suze: know that our insurance policy on this home only insures 361 00:22:29,680 --> 00:22:32,810 Suze: up to $500 in cash. 362 00:22:33,469 --> 00:22:37,239 Suze: So you would lose all of this money? 363 00:22:37,979 --> 00:22:42,979 Suze: Dad, I am asking you to let me gather up 364 00:22:42,989 --> 00:22:49,869 Suze: the cash and little by little put it into money 365 00:22:49,880 --> 00:22:54,550 Suze: market accounts at banks or at brokerage firms because I 366 00:22:54,560 --> 00:22:58,150 Suze: have a feeling it might be a lot to say, dad, 367 00:22:58,689 --> 00:23:01,069 Suze: you worked so hard for this money 368 00:23:01,560 --> 00:23:07,319 Suze: and let's say it is 30 40 $50,000 that he 369 00:23:07,329 --> 00:23:11,448 Suze: keeps around there. He's losing at least 370 00:23:12,170 --> 00:23:16,959 Suze: on that 2 to $3000 a year of interest. Number one, 371 00:23:17,469 --> 00:23:21,420 Suze: and that money is at risk. You can tell him 372 00:23:21,430 --> 00:23:24,900 Suze: if he wants to be safe, that's not being safe. 373 00:23:25,560 --> 00:23:29,219 Suze: The other thing that you can do is say, all right, dad, 374 00:23:29,229 --> 00:23:32,060 Suze: if you want the cash, let's go down and open 375 00:23:32,069 --> 00:23:37,739 Suze: up a safety deposit box in joint name at a bank. 376 00:23:38,160 --> 00:23:40,859 Suze: If they even offer them anymore, 377 00:23:41,160 --> 00:23:43,879 Suze: the least you can do is try to get a 378 00:23:43,890 --> 00:23:49,969 Suze: serious fireproof box that you keep the money in. But 379 00:23:49,979 --> 00:23:52,170 Suze: I can tell you because of people who have done 380 00:23:52,180 --> 00:23:55,869 Suze: that in the past. If the fire is hot enough, 381 00:23:55,880 --> 00:24:00,020 Suze: it will disintegrate all the paper that's in there and 382 00:24:00,030 --> 00:24:02,709 Suze: it will all be lost. For those of you who 383 00:24:02,719 --> 00:24:04,929 Suze: are keeping gold at home, 384 00:24:05,530 --> 00:24:10,150 Suze: people have gone through serious fires. The gold has melted 385 00:24:10,640 --> 00:24:14,718 Suze: into one another. A lot of it was just all 386 00:24:14,729 --> 00:24:18,189 Suze: over the place so it can become a mess. So 387 00:24:18,199 --> 00:24:26,448 Suze: keeping anything above $500 around isn't very smart. Number one, 388 00:24:26,760 --> 00:24:32,879 Suze: number two, I really think since you're both on these accounts, 389 00:24:33,089 --> 00:24:34,899 Suze: you should take the power 390 00:24:35,219 --> 00:24:40,540 Suze: and change the accounts to, like I said, a high 391 00:24:40,550 --> 00:24:44,510 Suze: yielding money market account or treasury bills, whatever it may 392 00:24:44,520 --> 00:24:48,698 Suze: be at a brokerage firm because you need something that 393 00:24:48,709 --> 00:24:52,869 Suze: will give you more than $250,000 of insurance. Right now. 394 00:24:52,880 --> 00:25:00,750 Suze: Your father is easily throwing away close to $40,000 a 395 00:25:00,760 --> 00:25:02,770 Suze: year of interest. 396 00:25:03,900 --> 00:25:08,229 Suze: And I think so over 10 years, that's $400,000. I 397 00:25:08,239 --> 00:25:10,510 Suze: think you sit down with him. You have an adult 398 00:25:10,520 --> 00:25:14,989 Suze: conversation with him. If he still refuses in everything, 399 00:25:15,750 --> 00:25:17,589 Suze: I have a feeling you should just do it on 400 00:25:17,599 --> 00:25:22,270 Suze: your own and suffer the consequences. You say dad, these 401 00:25:22,280 --> 00:25:25,199 Suze: are not good decisions. I am not going to let 402 00:25:25,209 --> 00:25:29,500 Suze: you do this and therefore the two of us are 403 00:25:29,510 --> 00:25:32,599 Suze: going to do this. You're gonna sign for this and 404 00:25:32,609 --> 00:25:35,390 Suze: I don't care what you say, you're making a mistake. 405 00:25:35,400 --> 00:25:38,180 Suze: So that's what you need to do. Judy. You need 406 00:25:38,189 --> 00:25:41,670 Suze: to become the adult in this situation. And I know 407 00:25:41,680 --> 00:25:43,739 Suze: you think that's not being a good daughter, 408 00:25:44,180 --> 00:25:48,119 Suze: but it really, really is. And if anything, maybe you 409 00:25:48,130 --> 00:25:52,020 Suze: can have him listen to this podcast and let him 410 00:25:52,030 --> 00:25:55,739 Suze: hear me say, papa, please listen to your daughter. You 411 00:25:55,750 --> 00:26:00,619 Suze: really aren't doing what's right for you and you're really 412 00:26:00,630 --> 00:26:03,670 Suze: not doing what's right for your daughter. Ok. 413 00:26:04,060 --> 00:26:06,680 KT: All right, Suze, that was my last question. So, do 414 00:26:06,689 --> 00:26:08,189 KT: you have a quizzie for me? 415 00:26:09,619 --> 00:26:12,469 KT: Uh oh, she has a doozy of a quizzie, don't you? 416 00:26:12,660 --> 00:26:14,139 Suze: I kind of do. 417 00:26:14,250 --> 00:26:17,919 KT: Oh boy. All right. Get ready. Everybody. I'm not in 418 00:26:17,930 --> 00:26:18,709 KT: this alone. 419 00:26:18,719 --> 00:26:23,869 Suze: Now, when we say quizze, these are questions that I 420 00:26:23,880 --> 00:26:29,040 Suze: have chosen from what you have sent in that sometimes 421 00:26:29,050 --> 00:26:32,300 Suze: deals with facts and things that you have wrong. 422 00:26:32,640 --> 00:26:36,129 Suze: Sometimes you need answers to questions as to what you 423 00:26:36,140 --> 00:26:40,280 Suze: can and cannot do. Sometimes you're asking for my opinion. 424 00:26:40,489 --> 00:26:44,329 Suze: So let's see what KT does with this one. 425 00:26:45,339 --> 00:26:49,890 Suze: Hi, lovelies Suze and KT. I love your podcast and 426 00:26:49,900 --> 00:26:53,469 Suze: I am grateful that there are people in this world 427 00:26:53,479 --> 00:26:56,479 Suze: who truly want to help others in regards to their 428 00:26:56,489 --> 00:27:02,670 Suze: financial issues. Isn't that the truth? KT that is so true. Right. 429 00:27:02,680 --> 00:27:05,989 Suze: I know you have addressed this question in the past, 430 00:27:06,290 --> 00:27:08,290 Suze: but I just read 431 00:27:08,530 --> 00:27:15,300 Suze: that social security could possibly decrease by 20% by 2033. 432 00:27:15,930 --> 00:27:19,400 Suze: This is the time I was planning on taking my 433 00:27:19,410 --> 00:27:23,369 Suze: full benefits. I don't have much money and want to 434 00:27:23,380 --> 00:27:29,900 Suze: hold out till I'm 72 to collect my social security. 435 00:27:29,959 --> 00:27:34,800 Suze: But now I am second guessing that decision. So here 436 00:27:34,810 --> 00:27:39,079 Suze: is the question to you, Miss Travis and everybody, should 437 00:27:39,089 --> 00:27:43,300 Suze: this person wait till they are 72 438 00:27:43,959 --> 00:27:48,430 Suze: to collect their full social security or not since that 439 00:27:48,439 --> 00:27:49,569 Suze: was their plan? 440 00:27:50,849 --> 00:27:52,300 KT: Yeah, I think they should, 441 00:27:54,050 --> 00:27:56,520 KT: they should until you're 72. 442 00:27:56,770 --> 00:27:58,359 KT: So, is that your final answer? 443 00:27:58,369 --> 00:28:01,800 KT: Yea, because we're not sure if that's gonna happen. 444 00:28:02,030 --> 00:28:04,599 Suze: They're gonna reduce it by 20%. We're not sure. 445 00:28:04,609 --> 00:28:05,479 KT: We're not sure. 446 00:28:05,489 --> 00:28:09,020 Suze: We're not sure. So you would tell this person to 447 00:28:09,030 --> 00:28:12,380 Suze: wait till they are 72 to collect their social security? 448 00:28:12,390 --> 00:28:15,510 KT: I think so because even if they took it earlier, 449 00:28:15,520 --> 00:28:16,959 KT: I don't know how much 450 00:28:17,250 --> 00:28:21,339 KT: of a percentage they would lose from not waiting until... not waiting the distance. 451 00:28:22,530 --> 00:28:22,819 Suze: So that's your final answer? (Suze makes the wrong answer sound) 452 00:28:26,219 --> 00:28:29,979 KT: Oh, no. Come on. All right. So what should they do? 453 00:28:32,189 --> 00:28:38,280 Suze: KT... full retirement age if you're born 1960 or later is 454 00:28:38,290 --> 00:28:39,439 Suze: 67 455 00:28:40,089 --> 00:28:45,500 Suze: your social security benefit will increase by 8% a year 456 00:28:45,510 --> 00:28:47,979 Suze: until you are 70. 457 00:28:48,719 --> 00:28:50,530 Suze: After 70 458 00:28:51,209 --> 00:28:56,130 Suze: it no longer increases at all. If you wait till 459 00:28:56,140 --> 00:29:01,630 Suze: you are 72 I knew you didn't know if you 460 00:29:01,680 --> 00:29:06,469 Suze: know that. Yeah. And if you wait one second past 461 00:29:06,479 --> 00:29:10,579 Suze: the age of 70 you are so wasting money. It's 462 00:29:10,589 --> 00:29:14,209 Suze: not even funny because you would be getting all of 463 00:29:14,219 --> 00:29:17,560 Suze: those payments. That could be a few $1000 a month. 464 00:29:17,930 --> 00:29:20,699 Suze: So you wait two years. Are you kidding me? 465 00:29:20,979 --> 00:29:24,260 Suze: The latest? Any of you should wait to collect social 466 00:29:24,270 --> 00:29:29,949 Suze: security is age 70. There you go. Miss Travis. 467 00:29:31,380 --> 00:29:32,469 KT: I didn't know that. 468 00:29:32,479 --> 00:29:34,089 Suze: I know you didn't. That's why I asked it. 469 00:29:34,229 --> 00:29:37,939 KT: Because the way that she wrote it sounds like 72... 470 00:29:38,000 --> 00:29:42,089 Suze: Do not try to make excuses that this woman wrote 471 00:29:42,099 --> 00:29:45,400 Suze: it in. And so therefore that's why you got it wrong. 472 00:29:45,859 --> 00:29:48,290 KT: No, for everyone did it sound like 72... 473 00:29:48,310 --> 00:29:52,170 Suze: Do you see what what she's doing. Do you understand what she's doing here? 474 00:29:52,180 --> 00:29:54,670 Suze: She's trying to get you all to agree with her 475 00:29:54,680 --> 00:29:57,260 Suze: that it's ok that she didn't know it's ok that 476 00:29:57,270 --> 00:29:59,869 Suze: she didn't know but it will never be ok again. 477 00:30:00,180 --> 00:30:02,609 Suze: All right. Take us out Miss Travis. 478 00:30:02,829 --> 00:30:05,949 KT: So there's only one thing we want you to remember. 479 00:30:06,000 --> 00:30:10,109 KT: First of all, have a great birthday brother and today 480 00:30:10,119 --> 00:30:11,790 KT: wherever you go, 481 00:30:12,410 --> 00:30:15,500 KT: wherever you go, Chris, I want you to create a 482 00:30:15,510 --> 00:30:19,060 KT: more peaceful, joyful, and loving world. 483 00:30:19,069 --> 00:30:22,020 Suze: And if all of you say that every single day, 484 00:30:22,030 --> 00:30:25,589 Suze: we promise you you will be what? 485 00:30:25,599 --> 00:30:27,270 KT: Unstoppable? 486 00:30:32,489 --> 00:30:33,829 Intro/Outro: Music Out.