1 00:00:22,480 --> 00:00:22,980 Music: Music In. 2 00:00:33,740 --> 00:00:39,460 Robert: July 28, 2022. Hi everybody, it's Robert. Suze's producer here. 3 00:00:40,040 --> 00:00:42,430 Robert: So, Suze and KT are on their way back from 4 00:00:42,430 --> 00:00:46,229 Robert: KT's birthda fishing trip in British Columbia. And I gotta 5 00:00:46,229 --> 00:00:48,490 Robert: tell you from the text that I've received, they had 6 00:00:48,490 --> 00:00:51,830 Robert: an absolute blast and they really can't wait to tell 7 00:00:51,830 --> 00:00:52,849 Robert: you all about it. 8 00:00:53,440 --> 00:00:56,460 Robert: Now. While they're in transit this morning 9 00:00:56,840 --> 00:01:00,620 Robert: we put together a very special Ask Suze and KT 10 00:01:00,620 --> 00:01:01,360 Robert: Anything 11 00:01:01,740 --> 00:01:03,650 Robert: real estate, mixed bag. 12 00:01:04,040 --> 00:01:07,240 Robert: What does that mean robert? Well, using real estate as 13 00:01:07,240 --> 00:01:08,060 Robert: a theme, 14 00:01:08,640 --> 00:01:12,949 Robert: you're gonna hear some great questions and answers from episodes 15 00:01:12,959 --> 00:01:16,580 Robert: that ran this past year. In fact, you get to 16 00:01:16,580 --> 00:01:20,330 Robert: hear the debut of the Can I Afford It? quizzie 17 00:01:21,120 --> 00:01:22,330 Robert: We hope you enjoy: 18 00:01:22,420 --> 00:01:27,060 KT: The first question Susie I selected is from Marianela, 19 00:01:27,440 --> 00:01:31,040 KT: do you remember I worked with a great, great girl 20 00:01:31,040 --> 00:01:35,360 KT: named Marianela in san Francisco, she was so much fun. 21 00:01:35,740 --> 00:01:36,670 Suze: What did you do with her? 22 00:01:36,670 --> 00:01:39,670 KT: She was a secretary in an office that I was 23 00:01:39,670 --> 00:01:44,910 KT: consulting a design firm and she was the most fun ever. 24 00:01:44,920 --> 00:01:50,380 KT: You remember her? Oh my God, she lived in Oakland California. 25 00:01:50,380 --> 00:01:52,660 KT: She and every Sunday she would have these 26 00:01:53,040 --> 00:01:58,180 KT: incredible mexican family gatherings. Always invited us all the time. 27 00:01:58,180 --> 00:02:01,030 KT: We never went. Yeah, we never went because we never 28 00:02:01,030 --> 00:02:04,740 KT: wanted to go over the bridge. She was so much fun. 29 00:02:04,750 --> 00:02:06,060 KT: So much fun. 30 00:02:06,540 --> 00:02:11,000 KT: Anyway, Marianela. Suze's answering your question but you remind me 31 00:02:11,000 --> 00:02:14,940 KT: of such a great, great experience I had with my 32 00:02:14,940 --> 00:02:18,899 KT: Marianela back in the day in san Francisco. So here's 33 00:02:18,900 --> 00:02:20,160 KT: the question. Suze, 34 00:02:20,639 --> 00:02:25,820 KT: our Marianela from Boulder Colorado is 58 years old. She's 35 00:02:25,820 --> 00:02:30,330 KT: recently divorced and she wrote sadly. So she obviously didn't 36 00:02:30,330 --> 00:02:33,549 KT: want this divorce, but she has some money for a 37 00:02:33,550 --> 00:02:37,050 KT: down payment on a new home. She has about $100,000 38 00:02:37,440 --> 00:02:41,090 KT: And she works, she makes about 75,000 a year, which 39 00:02:41,090 --> 00:02:44,220 KT: is a very nice salary. She said the rents are 40 00:02:44,220 --> 00:02:51,950 KT: skyrocketing in Boulder and she's paying $1,999 a month. But 41 00:02:51,960 --> 00:02:53,250 KT: a townhouse 42 00:02:53,639 --> 00:02:59,660 KT: That is selling for 473,000 is a remodel and available. 43 00:03:00,040 --> 00:03:03,060 KT: So she said without buying a new home, she has 44 00:03:03,060 --> 00:03:07,750 KT: about 500,000 saved for her retirement, which she wants to 45 00:03:07,750 --> 00:03:11,560 KT: use when she's 65. She has no debt 46 00:03:11,940 --> 00:03:16,060 KT: and she wants your your help, Suze on deciding what 47 00:03:16,060 --> 00:03:19,650 KT: should she do? Should she buy this town house or rent, 48 00:03:20,139 --> 00:03:21,139 KT: continue renting? 49 00:03:21,139 --> 00:03:22,380 Suze: What would you tell her KT? 50 00:03:22,389 --> 00:03:23,950 KT: Definitely buy the home. 51 00:03:24,340 --> 00:03:27,680 KT: She's gonna make her feel great, she's gonna own something. 52 00:03:27,690 --> 00:03:31,200 KT: You know, she can afford to put a down payment 53 00:03:31,200 --> 00:03:34,340 KT: on still have money for her retirement and she has 54 00:03:34,340 --> 00:03:34,860 KT: a home 55 00:03:35,240 --> 00:03:36,260 KT: that she owns. 56 00:03:38,440 --> 00:03:39,960 KT: What would you tell her? Suze? 57 00:03:40,340 --> 00:03:43,400 Suze: I wouldn't tell her that we'll figure out the money. 58 00:03:43,410 --> 00:03:46,119 Suze: I think it's going to cost the same. Listen to 59 00:03:46,120 --> 00:03:47,260 Suze: me everybody, 60 00:03:47,940 --> 00:03:49,650 Suze: There was one word KT 61 00:03:50,340 --> 00:03:53,850 Suze: and Marianela one word in this email 62 00:03:54,740 --> 00:03:58,570 Suze: which says to me you can't do anything yet and 63 00:03:58,570 --> 00:04:02,220 Suze: it's not about the money, it's not about the money, 64 00:04:02,230 --> 00:04:06,950 Suze: it's right, it's right. You said you were recently divorced sadly. 65 00:04:07,240 --> 00:04:09,950 Suze: And what is my rule of thumb KT? don't do 66 00:04:09,950 --> 00:04:14,220 Suze: anything until you for six months to one year after 67 00:04:14,220 --> 00:04:16,960 Suze: suffering the loss of a loved one 68 00:04:17,339 --> 00:04:19,880 Suze: and the loss of a loved one comes in the 69 00:04:19,880 --> 00:04:20,960 Suze: form of death. 70 00:04:21,640 --> 00:04:24,060 Suze: But very interestingly enough, 71 00:04:24,640 --> 00:04:27,700 Suze: the loss of a loved one sometimes is even harder 72 00:04:27,720 --> 00:04:32,589 Suze: in divorce because they're still there. You maybe see them 73 00:04:32,589 --> 00:04:35,620 Suze: with their new person that they're with what it can 74 00:04:35,620 --> 00:04:38,159 Suze: be equally, if not harder 75 00:04:38,740 --> 00:04:40,960 Suze: when it's divorced that you don't want 76 00:04:41,640 --> 00:04:44,850 Suze: and actually death KT. So 77 00:04:45,540 --> 00:04:48,909 Suze: it is for that reason Marianela that I don't want 78 00:04:48,920 --> 00:04:52,950 Suze: you to do anything right here. And right now also 79 00:04:53,640 --> 00:04:56,850 Suze: You're 58, you want to retire 80 00:04:57,240 --> 00:04:59,960 Suze: In essentially seven years from now. 81 00:05:00,440 --> 00:05:02,150 Suze: You know when you're 65, 82 00:05:02,640 --> 00:05:05,250 Suze: seven years is not a very long time. 83 00:05:05,839 --> 00:05:09,080 Suze: So in seven years from now you will no longer 84 00:05:09,080 --> 00:05:13,360 Suze: have $75,000 a year of income. 85 00:05:13,839 --> 00:05:17,850 Suze: And you would not be that deep into this mortgage 86 00:05:17,860 --> 00:05:20,350 Suze: because even if it was a 30 year 87 00:05:20,940 --> 00:05:22,859 Suze: mortgage, fixed rate mortgage 88 00:05:23,240 --> 00:05:24,650 Suze: interest rates now are up. 89 00:05:25,240 --> 00:05:27,790 Suze: So it would be about a 4% rate to get 90 00:05:27,790 --> 00:05:30,360 Suze: a 30-year fixed rate at this point in time, 91 00:05:30,839 --> 00:05:37,279 Suze: Your monthly payments on that mortgage would be about $1830 92 00:05:37,279 --> 00:05:40,270 Suze: a month, close to what she pays in rent. But 93 00:05:40,279 --> 00:05:42,150 Suze: it's not just rent 94 00:05:42,640 --> 00:05:47,020 Suze: when you buy a home, you have property taxes, you 95 00:05:47,020 --> 00:05:49,660 Suze: have insurance and you have maintenance. 96 00:05:50,540 --> 00:05:52,849 Suze: So I always say that you have to add at 97 00:05:52,850 --> 00:05:57,860 Suze: least 30-40% above your mortgage payment 98 00:05:58,940 --> 00:06:03,200 Suze: for you to really figure out exactly what this would be. 99 00:06:03,210 --> 00:06:07,039 Suze: So you're looking at an additional 4 500 a month. 100 00:06:07,050 --> 00:06:12,260 Suze: So you're looking at about $2200 a month, $2300 a month. 101 00:06:12,940 --> 00:06:13,860 Suze: Which is 102 00:06:14,339 --> 00:06:17,930 Suze: higher than what you're paying right now. Now obviously you'll 103 00:06:17,930 --> 00:06:20,010 Suze: get a tax write off for the beginning years and 104 00:06:20,020 --> 00:06:20,659 Suze: everything 105 00:06:21,540 --> 00:06:23,160 Suze: but not right now, girlfriend. 106 00:06:23,540 --> 00:06:26,450 Suze: The house is old. You said it's 1983. 107 00:06:26,940 --> 00:06:29,650 Suze: That means it can need a new roof. It can 108 00:06:29,650 --> 00:06:33,390 Suze: need new water heaters. It can continue renting as your 109 00:06:33,390 --> 00:06:38,030 Suze: advice for now continue renting. Yes. Let her life unfold. 110 00:06:38,029 --> 00:06:41,960 Suze: Let's see what happens, sweetheart. You never know what God 111 00:06:41,960 --> 00:06:44,930 Suze: has in store for you. Yeah, that's true, Marienella . 112 00:06:45,440 --> 00:06:46,960 KT: Hi Suze and KT, 113 00:06:47,339 --> 00:06:50,450 KT: My husband refinanced our house and added me to the 114 00:06:50,450 --> 00:06:55,600 KT: mortgage and deed last year in January 2021. We're planning 115 00:06:55,600 --> 00:06:59,620 KT: to sell our home this year and will make 300,000 116 00:06:59,630 --> 00:07:00,659 KT: in gains 117 00:07:01,040 --> 00:07:04,200 KT: because of the housing market. This is after all the 118 00:07:04,200 --> 00:07:08,880 KT: money we put in for improvements. We file our taxes jointly. 119 00:07:09,130 --> 00:07:10,550 KT: So here's her question. 120 00:07:10,940 --> 00:07:13,340 KT: I have only been on the deed for one year 121 00:07:13,340 --> 00:07:16,070 KT: but lived in the residence for the past six years 122 00:07:16,070 --> 00:07:22,160 KT: with him. AM I eligible for the 250,000 tax exemption. 123 00:07:22,540 --> 00:07:25,180 KT: Or do I have to be on the deed for 124 00:07:25,180 --> 00:07:28,060 KT: two years as well. This is Rebecca, 125 00:07:28,540 --> 00:07:30,030 Suze: can I turn that into your quizzie? 126 00:07:30,610 --> 00:07:32,710 KT: I don't know the answer to that. I was I 127 00:07:32,710 --> 00:07:33,660 KT: didn't know that 128 00:07:34,240 --> 00:07:37,180 KT: you have to stay on. Indeed for two years maybe. 129 00:07:37,180 --> 00:07:37,960 KT: I don't know. 130 00:07:38,340 --> 00:07:40,560 Suze: I love when you say you don't know, I don't 131 00:07:41,540 --> 00:07:43,340 Suze: but I don't know. I thought this was a pretty 132 00:07:43,340 --> 00:07:49,250 Suze: good question. It says help capital gains home sale. So 133 00:07:49,260 --> 00:07:50,460 Suze: my dear Rebecca 134 00:07:50,840 --> 00:07:55,890 Suze: In order to take advantage of the $250,000 exemption. And 135 00:07:55,890 --> 00:07:59,310 Suze: what that means. Everybody is simply this. You own a 136 00:07:59,310 --> 00:08:00,760 Suze: home you purchased it, 137 00:08:01,140 --> 00:08:05,650 Suze: it is your primary residency. It's not a rental. It 138 00:08:05,650 --> 00:08:10,350 Suze: is a primary residency. Everybody on that deed 139 00:08:10,740 --> 00:08:18,480 Suze: gets a $250,000 exemption above your purchase price. So but 140 00:08:18,480 --> 00:08:21,340 Suze: to get that your name has to be on the 141 00:08:21,340 --> 00:08:24,960 Suze: d number one, not on the mortgage, but on the deed. 142 00:08:25,740 --> 00:08:28,710 Suze: And you have to have lived in that house for 143 00:08:28,710 --> 00:08:33,710 Suze: two out of the past five years as your primary residency. 144 00:08:33,720 --> 00:08:37,439 Suze: If you have not done that, you are not entitled 145 00:08:37,450 --> 00:08:40,560 Suze: to that $250,000 exemption. So 146 00:08:41,040 --> 00:08:42,959 Suze: no, you're not entitled 147 00:08:43,540 --> 00:08:43,959 KT: mm. 148 00:08:44,840 --> 00:08:47,560 Suze: Yeah. And and it doesn't matter if you're married, KT 149 00:08:47,570 --> 00:08:51,270 Suze: or whatever. It doesn't matter. It's like, let's say you 150 00:08:51,270 --> 00:08:53,460 Suze: and I weren't married. No, I'm so sad. I can't 151 00:08:53,460 --> 00:08:56,880 Suze: even stand it. So we're not married. Let's say we 152 00:08:56,880 --> 00:08:58,939 Suze: bought a house for a million dollars and now it's 153 00:08:58,940 --> 00:09:03,380 Suze: worth 1.5 million. We each get a $250,000 exemption if 154 00:09:03,380 --> 00:09:05,150 Suze: we were both on title for two 155 00:09:05,510 --> 00:09:07,550 Suze: In the past five years and lived in it as 156 00:09:07,550 --> 00:09:10,400 Suze: a primary residency. We sell it, we don't have to 157 00:09:10,400 --> 00:09:13,450 Suze: pay any capital gains. However, I just want to say 158 00:09:13,450 --> 00:09:18,210 Suze: one last thing to Rebecca Rebecca, you're only having $300,000 159 00:09:18,210 --> 00:09:19,550 Suze: of gains if you sell it. 160 00:09:20,340 --> 00:09:23,850 Suze: So $250,000 of that will be exempt. 161 00:09:24,240 --> 00:09:27,890 Suze: It is also possible that maybe over the years you've done, 162 00:09:27,900 --> 00:09:32,970 Suze: you know, $50,000 of renovations or something like that or 163 00:09:32,980 --> 00:09:37,650 Suze: after your real estate commission. It won't quite be 300,000 164 00:09:38,040 --> 00:09:41,900 Suze: dollars and gains totally. So I would not not sell 165 00:09:41,900 --> 00:09:44,479 Suze: it right now in real estate. Is that it's high 166 00:09:44,490 --> 00:09:47,610 Suze: just to wait another year just to save you know, 167 00:09:47,610 --> 00:09:51,810 Suze: capital gains tax on $50,000. Okay. Got that. Alright, gone. 168 00:09:51,820 --> 00:09:55,160 KT: Okay. This next question is from Cindy. 169 00:09:55,940 --> 00:09:59,940 KT: So here's my question. She said Suze, I sold a rental, 170 00:09:59,940 --> 00:10:02,860 KT: thinking about using the money to pay off our house 171 00:10:03,440 --> 00:10:06,160 KT: With the $300,000 proceed. 172 00:10:06,640 --> 00:10:11,150 KT: But the interest is only 3%. I'm about 12 years 173 00:10:11,150 --> 00:10:12,160 KT: to retiring 174 00:10:12,540 --> 00:10:15,960 KT: my husband. About nine years. We have no other debt. 175 00:10:16,440 --> 00:10:22,230 KT: Our home is worth 590,000. We owe about 218. We 176 00:10:22,230 --> 00:10:25,900 KT: have 12 months emergency fund. What are your thoughts on 177 00:10:25,900 --> 00:10:29,560 KT: paying off the house or investing this money? 178 00:10:32,140 --> 00:10:34,450 Suze: Well, let's see. How do you feel about the stock market right now Cindy? 179 00:10:35,040 --> 00:10:36,590 Suze: How do you feel if your money was in the 180 00:10:36,590 --> 00:10:37,349 Suze: stock market? 181 00:10:38,040 --> 00:10:41,480 Suze: Let's just say you took this money and you invested 182 00:10:41,480 --> 00:10:46,150 Suze: it in the stock market and now you're down 10 2030. 183 00:10:46,160 --> 00:10:49,160 Suze: Some stocks are down 40 50 80% 184 00:10:49,740 --> 00:10:53,550 Suze: versus you having your home paid off. 185 00:10:53,940 --> 00:10:56,760 Suze: What is the goal of money 186 00:10:57,240 --> 00:10:58,559 Suze: answer Miss Travis 187 00:10:59,240 --> 00:11:01,970 KT: to be secure to be secure. 188 00:11:04,040 --> 00:11:06,350 Suze: So my answer is dependent on you. 189 00:11:06,840 --> 00:11:10,350 Suze: What would make you feel more secure? 190 00:11:11,040 --> 00:11:13,610 Suze: Would you feel more secure if you own your home 191 00:11:13,620 --> 00:11:16,540 Suze: outright that way? You know, no matter what happens over 192 00:11:16,540 --> 00:11:20,099 Suze: these next 12 or nine years until you retire, you 193 00:11:20,100 --> 00:11:21,960 Suze: own your home outright. 194 00:11:23,040 --> 00:11:26,120 Suze: Would that make you feel more secure or would you 195 00:11:26,120 --> 00:11:28,950 Suze: feel more secure? Putting your money in the stock market 196 00:11:28,950 --> 00:11:30,440 Suze: and now it goes up and it goes down, it 197 00:11:30,440 --> 00:11:31,460 Suze: goes all around, 198 00:11:32,140 --> 00:11:35,460 Suze: which would make you feel more secure. If it were me. 199 00:11:36,140 --> 00:11:38,480 Suze: If it were Miss Travis, let's say it at the 200 00:11:38,480 --> 00:11:42,809 Suze: same time, what would we do pay the hot right. 201 00:11:42,809 --> 00:11:44,260 Suze: That's right. Pay it off. 202 00:11:44,940 --> 00:11:46,260 KT: That's what we would do. 203 00:11:46,740 --> 00:11:50,190 Suze: We would pay it off and then you would still 204 00:11:50,190 --> 00:11:55,800 Suze: have $80,000 because of the 300 U. O only 02 18. 205 00:11:55,809 --> 00:11:57,670 Suze: If you want to take some of that and dollar 206 00:11:57,670 --> 00:12:01,780 Suze: cost average or do whatever into the stock market or 207 00:12:01,790 --> 00:12:03,920 Suze: if you want to take that and take advantage of 208 00:12:03,920 --> 00:12:04,950 Suze: some really 209 00:12:05,340 --> 00:12:10,559 Suze: good quality stocks that are down here right now. Big time. 210 00:12:10,940 --> 00:12:13,990 Suze: Go ahead and do that. But the other thing you 211 00:12:13,990 --> 00:12:16,760 Suze: could do is if you pay off your mortgage, take 212 00:12:16,760 --> 00:12:20,589 Suze: your mortgage payment every single month and dollar cost average 213 00:12:20,600 --> 00:12:24,050 Suze: into these markets. Next question KT 214 00:12:24,740 --> 00:12:27,790 KT: I'm a longtime listener. I've learned so much from you 215 00:12:27,790 --> 00:12:32,150 KT: over the years. I'm now 38 years old and newly married. 216 00:12:32,640 --> 00:12:36,980 KT: My current investments are 80,000. Do you have a prenup? 217 00:12:36,990 --> 00:12:41,180 KT: My current investments are 80,000 in the stock market give 218 00:12:41,179 --> 00:12:42,260 KT: or take during this tumultuous time. 219 00:12:44,790 --> 00:12:45,760 Suze: Can you say that word 220 00:12:46,880 --> 00:12:47,210 KT: Toomultuous (laughs) 221 00:12:47,740 --> 00:12:48,800 Suze: You Sound like Colo.. 222 00:12:49,410 --> 00:12:52,950 KT: and also about 80,000 in my Roth Ira account. 223 00:12:53,340 --> 00:12:56,160 KT: I also have a 403 B. Through my employer, 224 00:12:56,540 --> 00:13:01,280 KT: My husband and I have about 20,000 in a shared 225 00:13:01,280 --> 00:13:05,260 KT: savings account. So Suze, My question is 226 00:13:05,840 --> 00:13:08,350 KT: we currently rent and we'd like to buy a home 227 00:13:08,350 --> 00:13:12,160 KT: in the next few years. If the real estate market improves, 228 00:13:12,640 --> 00:13:16,050 KT: where should we be putting our money towards saving for 229 00:13:16,050 --> 00:13:16,860 KT: a house? 230 00:13:17,240 --> 00:13:19,820 KT: It feels like a waste to put it in a 231 00:13:19,820 --> 00:13:24,730 KT: traditional savings account. However an I series bond seems to 232 00:13:24,730 --> 00:13:28,330 KT: long term since we would need to wait five years 233 00:13:28,330 --> 00:13:29,860 KT: to avoid a penalty. 234 00:13:30,540 --> 00:13:33,110 KT: So it said I read somewhere I should use my 235 00:13:33,110 --> 00:13:36,150 KT: Roth ira as a place to save for a home. 236 00:13:36,150 --> 00:13:37,180 KT: Your thoughts. 237 00:13:37,179 --> 00:13:43,050 Suze: No no no your Roth ira is money that you 238 00:13:43,050 --> 00:13:45,860 Suze: are putting there for when you retire. 239 00:13:46,540 --> 00:13:51,550 Suze: Don't use it for a home purchase. Now here's the problem. 240 00:13:51,940 --> 00:13:55,900 Suze: I don't know Rachel if this $20,000 is all the 241 00:13:55,900 --> 00:13:57,550 Suze: money that you have to your name. 242 00:13:58,240 --> 00:14:01,849 Suze: Besides what you said the 80,000 in the stock market 243 00:14:01,850 --> 00:14:03,460 Suze: and 4.03 b. and your Roth 244 00:14:04,140 --> 00:14:09,100 Suze: Because you need at least an eight month to 12-month 245 00:14:09,110 --> 00:14:10,460 Suze: emergency fund. 246 00:14:11,040 --> 00:14:13,459 Suze: And somehow I have a feeling 247 00:14:13,940 --> 00:14:18,770 Suze: That $20,000 is not an eight month or 12-month emergency 248 00:14:18,770 --> 00:14:19,760 Suze: fund for you. 249 00:14:20,340 --> 00:14:24,770 Suze: So what you need before you even buy a home 250 00:14:24,780 --> 00:14:28,540 Suze: before you put 20% down or 10% down on a 251 00:14:28,540 --> 00:14:32,250 Suze: home is you also need in addition to that in 252 00:14:32,260 --> 00:14:36,750 Suze: 8 to 12 month emergency fund. So I'm assuming that 253 00:14:36,750 --> 00:14:37,760 Suze: this is 254 00:14:38,140 --> 00:14:40,260 Suze: all the money that you have 255 00:14:40,740 --> 00:14:44,960 Suze: outside of what you said your investments. Therefore 256 00:14:45,640 --> 00:14:50,950 Suze: truthfully you should absolutely put it in the Alliant Credit Union. 257 00:14:51,340 --> 00:14:55,020 Suze: So go to my alliant dot com and number one 258 00:14:55,020 --> 00:14:56,460 Suze: take advantage of 259 00:14:56,940 --> 00:15:01,510 Suze: The interest rate they're currently giving. But if I were 260 00:15:01,510 --> 00:15:02,160 Suze: you 261 00:15:02,740 --> 00:15:07,620 Suze: I would each put in like $8800 I would open 262 00:15:07,620 --> 00:15:08,950 Suze: up two accounts 263 00:15:09,340 --> 00:15:13,960 Suze: Put in 88 or $80 $900 all at once. 264 00:15:14,740 --> 00:15:18,040 Suze: So you're making the interest on that money all at once. 265 00:15:18,290 --> 00:15:22,510 Suze: Then send in $100 a month, every month for the 266 00:15:22,510 --> 00:15:24,250 Suze: next 11 months 267 00:15:24,640 --> 00:15:30,660 Suze: And then you will qualify for what? The $100 bonus. 268 00:15:31,140 --> 00:15:34,560 Suze: So that's a big deal. So you're going to be 269 00:15:34,560 --> 00:15:36,990 Suze: doing great. But that's how I would do it if 270 00:15:37,000 --> 00:15:38,250 Suze: I were you. 271 00:15:38,640 --> 00:15:41,610 KT: And then they can have that flexibility if they need 272 00:15:41,610 --> 00:15:42,260 KT: the money. 273 00:15:42,270 --> 00:15:45,150 Suze: Yeah. Well that's what an emergency account is for KT. 274 00:15:45,640 --> 00:15:49,440 KT: This is from Ryan, your fellow night owl. Should I 275 00:15:49,440 --> 00:15:53,450 KT: ask more about that? Suze Ryan says Suze, I'm your 276 00:15:53,450 --> 00:15:56,160 KT: fellow night owl. Do you have like a little secret 277 00:15:56,540 --> 00:15:58,700 KT: relationship with Ryan at night? 278 00:15:58,710 --> 00:16:01,760 Suze: Well many of you who know that you write in 279 00:16:02,240 --> 00:16:05,410 Suze: to the ask Suze podcast a lot of times when 280 00:16:05,410 --> 00:16:07,960 Suze: I answer these. Is that one 281 00:16:08,340 --> 00:16:14,090 Suze: or two or three or four a.m. In the morning? 282 00:16:14,100 --> 00:16:19,410 Suze: That's when I normally write. And the truth of the 283 00:16:19,410 --> 00:16:20,550 Suze: matter is 284 00:16:21,140 --> 00:16:22,660 Suze: I don't really like to sleep. 285 00:16:23,340 --> 00:16:26,470 Suze: I have so much fun. I love my life so 286 00:16:26,470 --> 00:16:27,060 Suze: much 287 00:16:27,440 --> 00:16:28,160 Suze: that it's like, 288 00:16:28,840 --> 00:16:29,860 Suze: I don't want to waste 289 00:16:30,240 --> 00:16:32,030 Suze: all this time going. Do you know what I figured 290 00:16:32,030 --> 00:16:33,360 Suze: out KT when I was younger. 291 00:16:34,940 --> 00:16:37,850 Suze: Want to hear this. That if you sleep 292 00:16:38,640 --> 00:16:42,520 Suze: Seven hours a night. I think it was. I know 293 00:16:42,520 --> 00:16:44,670 Suze: you do, but I think I did something like this 294 00:16:44,680 --> 00:16:48,260 Suze: and you live till seven, whatever you like sleep away. 295 00:16:48,260 --> 00:16:49,770 Suze: 21 years of your life. 296 00:16:50,240 --> 00:16:53,150 KT: Oh I remember you told me that I wanted more 297 00:16:53,160 --> 00:16:56,360 Suze: and I'm like, why would I want to? Even though 298 00:16:56,360 --> 00:17:00,000 Suze: I know sleep is what everybody says. Keep you, keeps 299 00:17:00,000 --> 00:17:00,860 Suze: you healthy, 300 00:17:01,240 --> 00:17:04,520 Suze: So maybe you should listen to me. Okay. Alright. 301 00:17:04,530 --> 00:17:08,090 KT: So Ryan's question is I could really use a loving 302 00:17:08,090 --> 00:17:11,320 KT: push in the right direction. I feel like I've been 303 00:17:11,320 --> 00:17:15,670 KT: standing at a real estate crossroads for far too long. 304 00:17:15,680 --> 00:17:18,820 KT: I purchased my home three years ago and I have 305 00:17:18,880 --> 00:17:25,450 KT: 100 and 90,000 remaining on a 15 year fixed at 3.25%. 306 00:17:26,140 --> 00:17:30,250 KT: I'm now entering my late thirties. And thanks to your mantra, 307 00:17:30,250 --> 00:17:33,730 KT: Live below your means. I'm debt free. With a passion 308 00:17:33,730 --> 00:17:38,040 KT: to save that. Suze's book that said, I currently have 309 00:17:38,040 --> 00:17:42,490 KT: enough saved without touching my emergency fund to play pay 310 00:17:42,490 --> 00:17:45,760 KT: off my mortgage. But is that the right move for me? 311 00:17:46,140 --> 00:17:49,699 KT: Is it better to refinance my current mortgage to a 312 00:17:49,700 --> 00:17:55,320 KT: 10 year at 2.67% keeping the majority still liquid in 313 00:17:55,320 --> 00:17:57,170 KT: my alliance savings account 314 00:17:57,540 --> 00:18:01,630 KT: To then invest in downturns in the market. Is there 315 00:18:01,630 --> 00:18:05,570 KT: a third option? All right, Suze. There's your night owl. 316 00:18:05,580 --> 00:18:10,380 Suze: So, my little night owl, here is my advice. You 317 00:18:10,380 --> 00:18:12,960 Suze: are 30 years of age. 318 00:18:13,340 --> 00:18:15,169 Suze: Do you wish you were 30 again? KT? 319 00:18:15,840 --> 00:18:19,510 KT: No, a little know what if you were 30. 320 00:18:19,510 --> 00:18:22,560 Suze: And you had met me at 30. Oh my God. 321 00:18:22,560 --> 00:18:24,070 Suze: We would have so much fun. 322 00:18:24,140 --> 00:18:26,030 KT: No, but we always said that we met each other 323 00:18:26,030 --> 00:18:27,169 KT: at the right time. 324 00:18:28,340 --> 00:18:31,610 Suze: You were very different at 30 and I was I 325 00:18:31,609 --> 00:18:35,379 Suze: was a waitress and I was in the height of 326 00:18:35,380 --> 00:18:38,870 Suze: my career moving fast forward. You would have loved me 327 00:18:38,869 --> 00:18:43,420 Suze: as a waitress would probably come and tell you that 328 00:18:43,420 --> 00:18:48,660 Suze: was maybe one of my favorite jobs in life. Got 329 00:18:48,660 --> 00:18:49,669 Suze: off track here. 330 00:18:49,940 --> 00:18:53,940 Suze: Which is this at 30. This is the time that 331 00:18:53,940 --> 00:18:56,790 Suze: you want to be taking that money and investing it 332 00:18:56,790 --> 00:19:01,680 Suze: in the stock market. Taking advantage of downturns, hoping and 333 00:19:01,680 --> 00:19:05,360 Suze: wishing and praying that the market goes down because you have, 30, 334 00:19:05,359 --> 00:19:08,639 Suze: 40 hopefully 50 years till you need this money. Are 335 00:19:08,640 --> 00:19:09,669 Suze: you kidding me? 336 00:19:10,240 --> 00:19:13,270 Suze: That's what you want to do. So no, do not 337 00:19:13,280 --> 00:19:16,450 Suze: pay off your mortgage number one, 338 00:19:16,840 --> 00:19:17,790 Suze: number two, 339 00:19:18,340 --> 00:19:20,609 Suze: right. Should you refinance? 340 00:19:21,240 --> 00:19:24,970 Suze: So let's let's actually try to do the numbers on this. 341 00:19:25,000 --> 00:19:28,419 Suze: You say that you bought this home three years ago 342 00:19:28,430 --> 00:19:30,959 Suze: and you have $190,000 left 343 00:19:31,440 --> 00:19:34,860 Suze: On your 15 year fixed at 3.25%. 344 00:19:35,340 --> 00:19:38,970 Suze: That means. And I'm just gonna guess at this that 345 00:19:38,970 --> 00:19:43,350 Suze: you have that your original mortgage was $193,000 346 00:19:44,240 --> 00:19:50,270 Suze: And that therefore your payments would be about $1422 a month. 347 00:19:50,840 --> 00:19:58,620 Suze: If you refinance. Now at 190,000 at 2.67% your payments. 348 00:19:58,630 --> 00:20:01,750 Suze: If it's for a ten-year fixed rate mortgage will be 349 00:20:01,750 --> 00:20:04,460 Suze: about 1872. 350 00:20:05,840 --> 00:20:11,770 Suze: That means it's gonna cost you $450 more a month. 351 00:20:12,440 --> 00:20:15,669 Suze: So that is a lot of money. However, 352 00:20:16,640 --> 00:20:18,350 Suze: if you can afford it 353 00:20:18,940 --> 00:20:22,270 Suze: doesn't make sense for you to do that. Number one, 354 00:20:22,270 --> 00:20:25,840 Suze: do you have the desire to own this home outright 355 00:20:26,000 --> 00:20:27,850 Suze: in 10 years, 356 00:20:28,640 --> 00:20:29,360 Suze: do you? 357 00:20:29,840 --> 00:20:32,859 Suze: Because really at this point, 358 00:20:33,330 --> 00:20:36,270 Suze: Given that you had a 15 year mortgage, 359 00:20:37,040 --> 00:20:39,560 Suze: You have 12 years left on it 360 00:20:40,740 --> 00:20:44,540 Suze: And now you're only going to refinance for what? Another 361 00:20:44,550 --> 00:20:45,770 Suze: 10 years. 362 00:20:46,840 --> 00:20:51,450 Suze: I'm not sure. It makes sense to do that depending 363 00:20:51,450 --> 00:20:57,770 Suze: on what your closing costs. Because remember Ryan every time 364 00:20:57,770 --> 00:21:01,360 Suze: you refinance, maybe you could refinance 365 00:21:01,840 --> 00:21:05,859 Suze: for no closing costs, but usually it was quite a 366 00:21:05,859 --> 00:21:07,360 Suze: few $1000. 367 00:21:07,840 --> 00:21:11,359 Suze: So then the question also becomes, do you have a 368 00:21:11,359 --> 00:21:12,360 Suze: better use 369 00:21:12,840 --> 00:21:17,780 Suze: For that? $450 extra per month to be putting it 370 00:21:17,790 --> 00:21:18,770 Suze: in the market. 371 00:21:19,340 --> 00:21:20,770 Suze: So I don't know. 372 00:21:21,140 --> 00:21:25,740 Suze: But somehow my gut tells me you should leave everything 373 00:21:25,740 --> 00:21:29,000 Suze: exactly how it is and take all the extra money. 374 00:21:29,000 --> 00:21:35,420 Suze: You can every single month and just keep investing investing, investing. 375 00:21:35,430 --> 00:21:39,670 Suze: What's the difference? 10 years, 12 years, you'll be 42, 376 00:21:40,140 --> 00:21:44,320 Suze: you know, for two years. I'm not sure it's worth it. Yeah, 377 00:21:44,320 --> 00:21:47,659 Suze: I wouldn't I wouldn't do it to for two years. 378 00:21:47,660 --> 00:21:50,830 Suze: I wouldn't do it. No, I take that extra money 379 00:21:50,830 --> 00:21:52,560 Suze: and try to make more with it. 380 00:21:52,940 --> 00:21:53,960 KT: I'd invest. 381 00:21:55,340 --> 00:21:56,720 Suze: What time is it, KT? 382 00:21:56,730 --> 00:21:58,570 KT: It's quizzie time! 383 00:21:58,580 --> 00:22:02,800 Suze: Now I'm doing a different kind of a quizzie for you. 384 00:22:03,940 --> 00:22:07,980 Suze: It is and it's one for actually all of you. 385 00:22:08,000 --> 00:22:11,650 Suze: As you know quizzie time is where one of you 386 00:22:11,650 --> 00:22:16,260 Suze: have written in. I've read your questions and I choose 387 00:22:16,260 --> 00:22:16,770 Suze: one 388 00:22:17,140 --> 00:22:18,550 Suze: that I want 389 00:22:19,040 --> 00:22:21,310 Suze: you to be able to answer on your own as 390 00:22:21,310 --> 00:22:23,170 Suze: well as KT . 391 00:22:24,040 --> 00:22:27,550 Suze: Now for some reason as of late KT, 392 00:22:28,340 --> 00:22:32,610 Suze: hundreds of people have been writing in under the topic. 393 00:22:32,619 --> 00:22:38,180 Suze: Can I afford it? And many of you write it 394 00:22:38,180 --> 00:22:38,859 Suze: and say 395 00:22:39,340 --> 00:22:41,950 Suze: can't you bring back the can I afford it segment? 396 00:22:42,440 --> 00:22:45,390 Suze: So I think bringing it back in the form of 397 00:22:45,390 --> 00:22:45,950 Suze: a quizzie. 398 00:22:47,240 --> 00:22:51,050 Suze: is interesting as to how would you answer 399 00:22:51,840 --> 00:22:54,060 Suze: this person's question? 400 00:22:54,940 --> 00:22:57,670 Suze: So this person's name is Sarah 401 00:22:58,240 --> 00:23:02,560 Suze: and Sarah says I am writing to ask if I 402 00:23:02,560 --> 00:23:05,670 Suze: can afford to buy a home all of you may 403 00:23:05,670 --> 00:23:08,560 Suze: want to take out a pencil and paper. 404 00:23:09,440 --> 00:23:10,270 KT: Mhm 405 00:23:10,640 --> 00:23:19,850 Suze: Sarah has been approved for a $310,000 loan. She currently rents, 406 00:23:20,240 --> 00:23:23,240 Suze: Her lease is going to end in four months. 407 00:23:23,740 --> 00:23:25,959 Suze: Her daughter starts high school 408 00:23:26,440 --> 00:23:28,170 Suze: in fall of this year 409 00:23:28,940 --> 00:23:31,530 Suze: and she would like to move closer to her daughter's 410 00:23:31,530 --> 00:23:32,270 Suze: high school. 411 00:23:33,040 --> 00:23:35,950 Suze: She liked to drive her daughter to school every day. 412 00:23:36,740 --> 00:23:37,270 Suze: So 413 00:23:37,740 --> 00:23:41,160 Suze: even though she says she can move into another rental. 414 00:23:41,740 --> 00:23:45,350 Suze: The current market in her area is such that a 415 00:23:45,350 --> 00:23:50,260 Suze: two bathroom apartment is renting for 1750. 416 00:23:50,840 --> 00:23:54,260 Suze: So she's wondering if it would be best to invest. 417 00:23:54,640 --> 00:23:58,960 Suze: That's $1700, into a home. 418 00:23:59,440 --> 00:24:02,669 Suze: Here are her stats, everybody. 419 00:24:03,040 --> 00:24:04,060 Suze: So you 420 00:24:04,640 --> 00:24:07,160 Suze: seriously want to write these down 421 00:24:08,040 --> 00:24:12,450 Suze: Again? She is 41 years of age. 422 00:24:14,840 --> 00:24:15,560 Suze: All right. 423 00:24:15,940 --> 00:24:20,670 Suze: If she decides to rent, it will be $1750 a month. 424 00:24:22,440 --> 00:24:28,170 Suze: She brings home $4800 a month. 425 00:24:29,940 --> 00:24:31,460 Suze: Her expenses, 426 00:24:32,340 --> 00:24:35,760 Suze: are $4800 a month. 427 00:24:37,550 --> 00:24:39,060 Suze: She's been preapproved 428 00:24:39,740 --> 00:24:43,850 Suze: For a $310,000 mortgage. 429 00:24:45,140 --> 00:24:50,960 Suze: Okay. She has $36,000 in savings. That is it. 430 00:24:51,970 --> 00:24:55,100 Suze: She has $4,800 a month in expenses, 431 00:24:55,740 --> 00:24:59,550 Suze: But only $36,000 in savings. 432 00:25:00,040 --> 00:25:02,050 Suze: So just to give all of you a hint 433 00:25:02,740 --> 00:25:06,180 Suze: just to start what you would all be doing to 434 00:25:06,180 --> 00:25:07,359 Suze: figure this out 435 00:25:07,940 --> 00:25:10,400 Suze: is you would first start with the fact that her 436 00:25:10,400 --> 00:25:11,450 Suze: expenses 437 00:25:11,840 --> 00:25:13,960 Suze: Our $4800 a month. 438 00:25:14,840 --> 00:25:16,609 Suze: And I have asked all of you to have a 439 00:25:16,609 --> 00:25:18,950 Suze: 12-month emergency fund. 440 00:25:19,340 --> 00:25:24,260 Suze: So that would be $57,600 441 00:25:25,410 --> 00:25:32,359 Suze: In an emergency fund. So, she is almost $21,600 short 442 00:25:32,940 --> 00:25:36,770 Suze: of an emergency fund. And that is before her down payment. 443 00:25:37,740 --> 00:25:41,960 Suze: She has $40,000 in a retirement account. 444 00:25:42,640 --> 00:25:44,560 Suze: And the last thing you should know 445 00:25:45,240 --> 00:25:49,830 Suze: Is that she filed for Chapter seven bankruptcy with a 446 00:25:49,830 --> 00:25:54,960 Suze: home foreclosure just six years ago. 447 00:25:55,340 --> 00:25:58,650 KT: Oh ouch. She can't do it right. But now she 448 00:25:58,650 --> 00:26:02,660 KT: wants to buy a home. She's denied. 449 00:26:03,540 --> 00:26:04,670 Suze: Totally denied? 450 00:26:05,240 --> 00:26:10,700 KT: Well first of all you said she brings home $4800 451 00:26:10,700 --> 00:26:16,120 KT: a month? Her net income her expenses are 4800 month. 452 00:26:16,130 --> 00:26:19,550 KT: She has 36,000 and savings. 453 00:26:20,040 --> 00:26:23,460 KT: She has 40,000 in retirement. And 454 00:26:24,340 --> 00:26:27,119 KT: I don't understand how she's going to be able to 455 00:26:27,119 --> 00:26:29,520 KT: do any of this if she doesn't, there's not even 456 00:26:29,520 --> 00:26:30,550 KT: a cushion here. 457 00:26:31,040 --> 00:26:36,359 KT: She's saying that the difference between her mortgage and household 458 00:26:36,359 --> 00:26:39,970 KT: expenses and everything is what I would currently pay in 459 00:26:39,970 --> 00:26:40,360 KT: rent 460 00:26:40,840 --> 00:26:43,470 KT: and it would come from what I contribute to savings. 461 00:26:43,480 --> 00:26:47,910 Suze: Is she approved or is she denied? 462 00:26:48,100 --> 00:26:51,050 KT: And she has a she filed bankruptcy. 463 00:26:51,060 --> 00:26:55,480 Suze: Is she approved or is she denied denied? Say it 464 00:26:55,480 --> 00:26:56,960 Suze: like you mean it girlfriend! 465 00:26:56,970 --> 00:26:59,560 KT: Sarah you're denied honey! 466 00:26:59,640 --> 00:27:02,490 Suze: Sarah with all our love to all of you and 467 00:27:02,490 --> 00:27:05,060 Suze: to save you from claiming another 468 00:27:05,740 --> 00:27:07,659 Suze: possible bankruptcy 469 00:27:08,140 --> 00:27:11,020 KT: one day, one day you can do it, cut back 470 00:27:11,020 --> 00:27:14,859 KT: on expenses and really just really 471 00:27:15,240 --> 00:27:19,560 KT: just wait. This is not the time right now. 472 00:27:19,940 --> 00:27:21,170 Suze: Right, KT, 473 00:27:21,540 --> 00:27:24,080 Suze: you know what time this is then after quizzie time 474 00:27:24,080 --> 00:27:25,050 Suze: is what time? 475 00:27:25,540 --> 00:27:31,620 KT: Goodbye. Good, good, good, good. It's not good night because 476 00:27:31,619 --> 00:27:36,530 KT: it's still morning for us and it's like okay, whatever. 477 00:27:36,540 --> 00:27:39,550 Suze: Alright everybody until Sunday. 478 00:27:40,040 --> 00:27:42,619 Suze: There's really only one thing that we want you to 479 00:27:42,619 --> 00:27:46,250 Suze: remember and that is for you to all be safe. 480 00:27:46,250 --> 00:27:48,459 KT: Strong and secure. 481 00:27:48,460 --> 00:27:50,780 Suze: When are you going to get it? Right. 482 00:27:50,790 --> 00:27:51,520 KT: I got it. 483 00:27:51,680 --> 00:27:53,030 KT: No. You didn't. 484 00:27:53,040 --> 00:27:55,300 KT: Safe. Strong and secure. 485 00:27:55,300 --> 00:27:57,859 Suze: Strong. Safe and secure. 486 00:27:58,440 --> 00:27:59,580 KT: I don't think so. 487 00:27:59,590 --> 00:28:00,920 Suze: Oh, she's written it down. 488 00:28:00,920 --> 00:28:05,160 KT: I wrote it down. So everybody I think that I'm right. 489 00:28:08,220 --> 00:28:11,600 Suze: Safe. Strong and secure. All right. She's right. What can 490 00:28:11,600 --> 00:28:16,909 Suze: I say? Strong and secure. You're right, my love. All right. 491 00:28:16,910 --> 00:28:22,260 Suze: See you on Sunday for Suze school. Alright. Bye bye bye. 492 00:28:23,350 --> 00:28:23,560 Music: Music Out.