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Speaker 1: Hello there, it is Ask Suze Anything. And as I keep saying over and over again, you most certainly do. As many of you may note, as you are sending in your questions, you are getting a response now. I warned you of all this, but you didn’t want to listen to me, that there are so many emails coming in that I personally cannot anymore answer every single one of them. Or that is all I would be doing 24 hours a day, and I would need more than seven days a week to do so. But I still pick some that I do answer one on one. And again, if you write in to AskSuzePodcast@gmail.com, and your question is selected, I will answer it on the air. So, you should just keep sending them, you just never know. Now, before I get to the questions that I'm going to answer in this week's podcast, I want to talk to you. So many of you, you are writing in and here's the question you're asking me. Suze, I have $10k, what's the best way for me to invest it? Suze, I have $200k in my retirement account and I'm just about to retire, what should I invest in? Suze, I just inherited money from my parents, or my father, or mother, or whatever. And in an inherited Roth IRA, there's a lot of money in there, can you tell me exactly what I should do with it? And you keep asking me financial questions about what to do with your money. Do you understand that when you ask somebody what to do with your money, you are setting yourself up, in my opinion, to be absolutely ripped off? Because that person could say to you, do this, do that, do that, do this, and you're going to say, OK, thank you. A good financial advisor would never tell you what to do with your money until they asked you so many questions about yourself, about your situation, about your job, about your family, everything, that it would take an hour, two or three before they could tell you what to do. When I personally sat behind the desk and I saw clients, and trust me, I saw a lot of clients. I would be booked, I never started before 10 a.m., that's because I did research before 10 a.m. But when I lived on the West Coast anyway, but 10 in the morning all the way until eight, or nine, or 10 at night, I would have clients one after another, after another. And that would sound like I saw a lot of people, but it would take me two to three hours for each person. So, the most that I could see really in one day would be three, possibly four people. That would be it. So, I just want to give you a little idea of some of the questions, just some of the questions, that I would ask the clients.I would ask them, how old are you? How old is your spouse? Are you healthy? Are you in a good relationship? Do you have kids? If you have kids, what are their ages? Do they have any disabilities? Hey, do they need braces? Do you like your job? Is it a secure job or you're going to inherit money? Are you going to have to take care of your parents? Does your house need any repairs? How old is your car? How many miles on it? Are you funding a college education? Do you yourself have student loans? Are you going to have a pension? What are your monthly expenses? What do you expect them to be when you retire? Do you have long term care insurance? What is the goal of the money you want to invest? If you invested $100k, how much could you afford to lose? Would you freak if it went from $100k to $50k? What is the social security you can expect? Do you have retirement accounts? Are they Roth or traditional? How much money is invested? What investments do you have? How much life insurance do you have? What kind of life insurance is it? Do you have disability insurance? Do you have health insurance? If you have health insurance, what kind? Does your employer offer a good retirement account? If so, what kind? Do they match? Do they offer an HSA? Do you owe any money – student loans, credit cards, personal loans? Any retirement accounts at old employers? Do you have a will? Do you have a trust? Do you have an advanced directive, a durable power of attorney for health care? And on, and on, and on.Those are just a few of the questions that I would need to know the answers from before I could tell you what to do with your money. And then you write me and you say to me, I have all this money in a Roth IRA, and I write you back and I go, what's it invested in? And then you write me back and you know what you say to me? Mutual funds. And I write you back and I go, what kind of mutual funds? And then you write me back and you say, I don't know. What do you mean, you don't know? That means you don't know where your money happens to be invested. That is just crazy, people. So, do you understand why I can't answer those questions, and it's just something that you should think about. All right, let's start.This one is from Danna. This one's sad. Hello, my name is Danna, and I have a question. First of all, she says, I'm not sure if this is really Suze replying, but I have a question. Danna, it's Suze replying, it's me. I was recently diagnosed with stage four colon cancer and I am unsure if I should work as much as possible for as long as possible to pay down my debt for my family. I turned 50 this year and want to know, do I continue to work, or should I be making memories with my kids, ages 22 and 19, while I'm here? I have about $17k in credit cards and about $18k in car debt. I know I need a will, but I don't have much. So, do I work as many hours as possible to pay down debt, or will it go away when I pass, so memories are what I should concentrate on? Any guidance would be appreciated. Thankful for all I have and wishing and praying for more time only. Oh Danna, it's so sad, right? Here, you are obviously facing the last days, or months, or years of your life, and you're worried about should you work more to pay down the debt or work on memories with the kids? Well, you know how I'm going to answer that, right? You should work on memories with the kids, especially if death is close. Your debt will disappear when you die. So, any credit card debt that you have or whatever, make sure you instruct your kids, do not pay that debt. That debt dies with you. As far as the car goes, hopefully they don't need that car, but that debt, they may repossess that car. But let them have it. Who cares? If I were you, I would make sure that I took care of myself in every possible way, because you never know when things can turn around. You never know. And I would absolutely spend this time with my kids. You know, I wanted to read Danna’s question to you because I know we never think it's going to happen to us. You know, we never think we're going to get sick, or ill, or be in an accident and therefore, it's always OK to spend the money that we have. We get a pay raise and all of a sudden, now we're driving a fancier car. We have a pay raise or a bonus coming in, and all of a sudden we decide, oh, I can afford to go on that vacation even though I have credit card debt. I have debt, I have this, I have that. And things happen. These are things you need to think about and make the most out of every single penny while you can.Next one is from Roxanne. My husband is completely uninterested in finances and is financially risk averse. This is the opposite dynamic that you describe in your podcast. I have the financial independence that I am seeking, but I worry about his finances. He has not opened a 401K with his job, nor doesn't understand the need for an emergency fund. Money, or a lack of money, has never been an issue for him or his family. As we prepare to start our family, I am worried about our financial future for our children, if something were to happen to me. Do you have any advice?Roxanne, it makes me wonder when you say here that money, or lack of money, has never been an issue for him or his family. Does that mean that he comes from a really wealthy family and that one day he's going to inherit a whole lot of money? Or, does that mean that money, or lack of money, meaning the fact that they didn't have it, never been an issue, they just didn't care? And for some reason, I think it's the second interpretation of, they just didn't care. So therefore, I'm going to answer this question, assuming that they didn't have money. It wasn't an issue for them and they just didn't care that they didn't have money. All right. If you are going to have children and you are going to stay married to this man, then therefore what you need to do, is to make sure that you have a serious term life insurance policy on you, protecting your children in case of your death. And rather than leaving that money to your husband, I would have it go to a living revocable trust, where you appointed a successor trustee as the person to take care of that money. To take care of it for who? For your children. So, I would set up everything so that the kids were the beneficiary of everything I had. Going again, to a living revocable trust, where there is a successor trustee, meaning that when you die, another person that you have appointed steps in and makes the decisions with that money. And I would tell your husband that's exactly what you are going to do with everything, your 401K, everything, and see what he says then.But here is another concern of mine. You stay with him, now you've set up the trust, you have a life insurance policy, but you don't die. And now you are getting more and more aggravated because it's not just about his 401K or emergency fund, it's about you need more money to take care of your kids, to fund their college education, to do all those things. And he is not contributing, and he is just continuing to spend money and to be irresponsible. And now it's starting to make you angry. And remember, anger is the main internal obstacle to wealth. The wealth not only of money, but the wealth of a relationship. And so, I have to tell you, I really think this is a warning sign. And until you resolve it, I am not sure that I would bring kids into a situation where you and your husband do not see eye to eye on money. Because what have I asked you all to do? I have asked you to substitute the word “life” for “money.” So, if you don't see eye to eye on money, you do not see eye to eye on life. Think about that one, girlfriend. OK, let's talk about babies, since we were just talking about babies. From Cassandra. Hi, Suze, we are expecting baby number two and I am planning on taking three months off for maternity leave. Currently, I am putting any additional cash we have leftover at the end of the month in a savings account to cover expenses during maternity leave. In December, when I return back to work, we are planning on starting to pay off all our debts. My question for you is, do we start paying off the bills that were sent to collections first, or should we pay off the bills that have not been turned into collections, first?Cassandra, I was so proud. I was thinking, yeah girlfriend, you're saving money and you're putting it into a savings account to cover the cash while you have maternity leave. And now you tell me that you have money in collections and all of these things. And I'm like, really? So, here's the thing, all right. If you have bills that are in collections already, those would not be the bills that I paid off first. Because when a bill already goes into collection, it has already done damage to your FICO score, your credit score. And if you pay off that bill, it will not help your FICO score at all. Now, I'm not telling you not to pay it, I'm just telling you, don't pay it first. Make sure that you have all your credit cards that are not in collection, debt that you have that is not in collections, you make sure you paid those bills on time and first. And after they are paid off, then deal with the bills that are in collection. With that said, however, you did not tell me how long these bills have been in collections. Please remember, that every debt that is in collections, there is a statute of limitation according to your state. And if you owe this money and you are now past that statute of limitations, sometimes it's three years, four years, five years. Then legally, the collection agency cannot come after you for that debt. So, just check the statute of limitations before you do anything, number one. And number two, if you say you are going to pay any amount of money on a bill that's in collection, the statute of limitations starts all over again. If you send in a check for whatever amount of money to any bill that's in collections, the statute of limitation starts all over again. It's something you should know.Next one is from Jamie. She says, Suze, we want to buy a house. But we wondered, should we save money for an emergency fund and pay off more debt first? We do not currently have an emergency fund. We just paid off over half my debt. Please let me know.You may be listening to me and you may be wondering why does Suze keep talking on this podcast about people who owe money and have debt, and who want to buy a home, kids, whatever it may be. The majority of you have debt and the majority of you are asking me these questions here. And I don't want you to make the mistakes that these people would have made if they hadn’t written in.Jamie, you listen to me. You cannot go ahead and buy a house if you don't even have an emergency fund and you have debt. If you have credit card debt and you don't have an emergency fund, that means what? That means you have more money going out than you have coming in. After you have paid off any debt that you have right now, you need an emergency fund. Why? Because when you purchase a home, and hopefully you will purchase a home with at least 20% down. All right, maybe 10% in some cases, but at least 10%. And so now you've put up all of this money as a down payment and now you don't have an emergency fund, and you get sick. Did you hear the very first question that I answered on the podcast today? Oh, method to my madness. The method being things can go wrong. You can get ill, you can be in an accident, and now you can't work anymore. So, you cannot pay the mortgage on this home anymore. You'll be OK in maybe six months, seven months, hopefully. Before that amount of time, you can't pay. If you have an emergency fund that includes your mortgage payment, your utility payment, your whatever it is you have to pay every single month. Not movies, not restaurants, but the must have expenses that must be met. Then you're not going to be in trouble of possibly losing your home to foreclosure and losing the 10 or 20% that you put down. So, do not be stupid. Do not just think, oh, I want to buy a home, and the lenders are going to lend me money to buy a home, so that means I can afford to buy a home. It's like you thinking that you have money in the bank because you have checks in your checkbook. It doesn't work that way. Just because you get a mortgage, just because you can purchase a home, you need to know that you have the money to keep that home if you no longer have income coming in. And when I see that you have debt, when I see you don't have an emergency fund, I see that you are heading for trouble. So, no, you are not to buy a home until you have your credit card debt paid off, until you have an eight-month emergency fund, and you can put at least 10%, preferably 20%, down. And, you know that your job is secure. Do you hear me, girlfriend? Got a little feisty there, didn't I? All right, let's do one more one more today. And let's end with a man. From Glenn, hello Suze, my name is Glenn. I was the first one in my family to go to college, as was my wife. What I remember about the school loans, is that I had three, and my wife had two. The whole debt fell on us. Anyway, we are both about 50 years old and I have a daughter going to college now, and a son in two years. We filled out the FAFSA and according to that, we are responsible for 75% of our daughter's college tuition and room and board, or $15k a year. Now, I imagine that will hold true when my son goes to school as well. So, when we're 58 years old and near retirement, we'll be in the hole for $120k+. I've asked financial advisors about it, and how I don't think it's right. They just blink at me and smile and say, refinance your mortgage and take out the equity. Thanks, Glenn.Glenn, you and your spouse took out student loans, and you paid them back. Why, why are you not allowing your kids to do the exact same thing?  At 58, you want to be $120k in debt, to send your kids to school? I don't think so, boyfriend. And taking out the equity in your home is not the answer. By the time you retire, remember, I want you to have your home paid off in full. So, is that in seven years after you’re 58, while you work until 70, but you're not going to be able to do that and do what? Pay off $120k of student loans. I don't think so. So, I think it's time that you sat down with your kids, even the one that's in school, and say, I don't know how we're going to do this. We have to come together as a family, and I have to figure this out with you. Either you have to go to community college, either you have to go somewhere, or you need to take out student loans. So, if it's $15k, why aren't they taking out direct loans? Maybe you take out a loan for $7500, or whatever. But I would not be taking on, at your age, $120k to send my kids to college. No way. That's a wrap for Ask Suze Anything today. In providing answers neither Suze Orman Media nor Suze Orman is acting as a Certified Financial Planner, advisor, a Certified Financial Analyst, an economist, CPA, accountant, or lawyer. Neither Suze Orman Media nor Suze Orman makes any recommendations as to any specific securities or investments. 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