1 00:00:41,500 --> 00:00:47,799 Suze: October 20th, 2024. Welcome everybody to the Women and Money podcast. 2 00:00:47,810 --> 00:00:51,830 Suze: And everybody smart enough to listen. Before I even go 3 00:00:51,840 --> 00:00:54,110 Suze: on to tell you that today is Suze School, which 4 00:00:54,119 --> 00:00:56,860 Suze: it is. So get out your Suze notebooks. It is 5 00:00:56,869 --> 00:01:01,959 Suze: so important when you hear me say and one smart 6 00:01:02,169 --> 00:01:06,599 Suze: enough to listen. This is not a podcast that is 7 00:01:06,610 --> 00:01:07,699 Suze: just for women. 8 00:01:08,230 --> 00:01:13,330 Suze: It is a podcast for every single person out there. 9 00:01:14,190 --> 00:01:18,929 Suze: But it is so important that we understand that women 10 00:01:18,940 --> 00:01:22,339 Suze: are very, very different in my opinion when it comes 11 00:01:22,349 --> 00:01:25,610 Suze: to what they do, how they feel, how they think, 12 00:01:26,050 --> 00:01:31,569 Suze: then men, for instance. So you cannot have in my opinion, 13 00:01:31,580 --> 00:01:38,650 Suze: a successful financial relationship unless you both understand how you 14 00:01:38,660 --> 00:01:42,370 Suze: feel about money, how you feel about who you are. 15 00:01:42,769 --> 00:01:46,349 Suze: Because it's not just about money. When I talk about money, 16 00:01:46,360 --> 00:01:50,660 Suze: I am talking about you cause money cannot do anything 17 00:01:50,669 --> 00:01:51,949 Suze: without you. 18 00:01:52,470 --> 00:01:57,989 Suze: And women feel different than men and do things differently 19 00:01:58,000 --> 00:02:02,010 Suze: and men do things differently. So you have to understand 20 00:02:02,019 --> 00:02:06,209 Suze: how you both work in order to have a successful relationship, 21 00:02:06,230 --> 00:02:10,008 Suze: which is what this podcast is also all about. So, 22 00:02:10,020 --> 00:02:13,089 Suze: it is for all of you, 23 00:02:13,235 --> 00:02:16,595 Suze: no matter who you are out there, I just want 24 00:02:16,604 --> 00:02:19,125 Suze: to make that point because I got an email the 25 00:02:19,133 --> 00:02:21,394 Suze: other day saying Suze, it's great that you have a 26 00:02:21,404 --> 00:02:25,304 Suze: Women and Money podcast. But what about us men, don't 27 00:02:25,315 --> 00:02:28,375 Suze: you think you should do something for us? Men? Well, men, 28 00:02:28,383 --> 00:02:31,654 Suze: you better understand how the women in your life work, 29 00:02:31,663 --> 00:02:35,225 Suze: feel and act with money for you to have a 30 00:02:35,235 --> 00:02:39,695 Suze: successful relationship. And so there you go. 31 00:02:40,029 --> 00:02:44,929 Suze: It's for everybody and obviously it's for everybody no matter 32 00:02:44,940 --> 00:02:52,210 Suze: what your sexual preference is, especially given my situation. All right, everybody. 33 00:02:53,139 --> 00:02:57,750 Suze: So many times it seems that a lot of you 34 00:02:57,758 --> 00:03:02,478 Suze: are seriously confused in terms of you don't know what 35 00:03:02,490 --> 00:03:06,460 Suze: to do with your money. And even though I've given 36 00:03:06,470 --> 00:03:13,080 Suze: you individual stocks and investments, you still are confused because 37 00:03:13,089 --> 00:03:15,899 Suze: maybe you didn't take advantage of it way back when, 38 00:03:15,910 --> 00:03:17,279 Suze: when I talked about them 39 00:03:17,580 --> 00:03:20,160 Suze: and you feel like you've missed the boat and you 40 00:03:20,169 --> 00:03:23,829 Suze: just don't know what to do. And briefly in a 41 00:03:23,839 --> 00:03:26,639 Suze: few podcasts ago, I said, listen, 42 00:03:28,000 --> 00:03:31,899 Suze: just keep investing. If you don't know what to do, 43 00:03:31,910 --> 00:03:34,679 Suze: you don't want to wait till maybe Keith does come 44 00:03:34,690 --> 00:03:38,889 Suze: out with his program that he's going to have, if 45 00:03:38,899 --> 00:03:40,550 Suze: you don't know what to do, 46 00:03:41,240 --> 00:03:46,779 Suze: just keep investing in index funds. And I want to 47 00:03:46,789 --> 00:03:51,130 Suze: go back to that at this point in time because 48 00:03:51,139 --> 00:03:54,500 Suze: I think it's really, really important that you understand, 49 00:03:54,830 --> 00:03:58,940 Suze: doesn't matter if you could have invested in something that's 50 00:03:58,949 --> 00:04:05,330 Suze: up 1000% or whatever, what matters is consistency, write that 51 00:04:05,339 --> 00:04:12,250 Suze: word down, consistency in your investment behaviors, 52 00:04:13,020 --> 00:04:17,399 Suze: meaning that you do something and you do it all 53 00:04:17,410 --> 00:04:20,779 Suze: the time, you just don't buy something and you never 54 00:04:20,790 --> 00:04:24,679 Suze: buy something again. But you make a plan that you 55 00:04:24,690 --> 00:04:29,420 Suze: can invest every single month or every three months or 56 00:04:29,428 --> 00:04:34,669 Suze: whatever it is. But you invest multiple times during a year, 57 00:04:34,690 --> 00:04:39,329 Suze: month in, months in, month out, months out, whatever it 58 00:04:39,339 --> 00:04:41,760 Suze: may be, you keep 59 00:04:42,165 --> 00:04:48,054 Suze: consistent in your investment behavior, which is why truthfully, I 60 00:04:48,065 --> 00:04:52,605 Suze: like retirement plans at work so much because they're doing 61 00:04:52,613 --> 00:04:56,035 Suze: it for you. If you have a 401k, a 403B 62 00:04:56,045 --> 00:04:59,844 Suze: or a TSP every single month. If you're signed up 63 00:04:59,855 --> 00:05:03,984 Suze: for your employer sponsored plan, you have a specific sum 64 00:05:03,994 --> 00:05:07,464 Suze: of money taken out of your checks every month and 65 00:05:07,475 --> 00:05:11,863 Suze: invested in that plan. And hopefully it is a Roth. 66 00:05:12,440 --> 00:05:15,269 Suze: You wanna make sure if your company offers a Roth 67 00:05:15,279 --> 00:05:19,579 Suze: retirement plan, regardless in my opinion of how much income 68 00:05:19,589 --> 00:05:23,170 Suze: you make, you better take advantage of it, especially. I 69 00:05:23,178 --> 00:05:26,450 Suze: just have to say this if you're making a lot 70 00:05:26,459 --> 00:05:31,380 Suze: of money and you no longer qualify for an individual 71 00:05:31,390 --> 00:05:36,140 Suze: Roth IRA because you're over the modified adjusted gross income limits. 72 00:05:36,660 --> 00:05:39,769 Suze: Then of course, you want to take advantage of your 73 00:05:39,779 --> 00:05:44,480 Suze: ROTH in your employer plan because there are no income 74 00:05:44,488 --> 00:05:46,000 Suze: limits to do that. 75 00:05:46,410 --> 00:05:48,390 Suze: So what are you all thinking? But that is a 76 00:05:48,399 --> 00:05:54,789 Suze: whole another podcast. So you're taking advantage of consistency, month 77 00:05:54,799 --> 00:05:58,959 Suze: in and month out. But where you all get confused 78 00:05:58,970 --> 00:06:02,589 Suze: even in your plan is you don't know what to 79 00:06:02,600 --> 00:06:05,959 Suze: invest in. You look at all the options and you're 80 00:06:05,970 --> 00:06:09,589 Suze: just totally like, they've given you 20 different choices and 81 00:06:09,600 --> 00:06:12,269 Suze: you don't know what to do. 82 00:06:13,220 --> 00:06:15,419 Suze: I'm gonna be telling you what to do in a second. 83 00:06:15,428 --> 00:06:17,200 Suze: So just stick with me here. 84 00:06:17,940 --> 00:06:22,750 Suze: But a lot of you who do invest on your own, 85 00:06:22,809 --> 00:06:27,790 Suze: you hear me simply say, buy this, buy that, maybe 86 00:06:27,799 --> 00:06:30,910 Suze: you're tuning into one podcast and that's the stock that 87 00:06:30,920 --> 00:06:34,630 Suze: you buy, but you don't do it on a dollar 88 00:06:34,640 --> 00:06:38,350 Suze: cost averaging basis, which is consistency. 89 00:06:38,928 --> 00:06:42,299 Suze: So the other day I was talking to my friend 90 00:06:42,309 --> 00:06:45,869 Suze: Nicholas and he's about 20 some odd years old now, 91 00:06:45,880 --> 00:06:50,070 Suze: I think, and I told Nicholas a few stocks to 92 00:06:50,079 --> 00:06:54,549 Suze: buy because I'm very good friends with his mother and 93 00:06:54,559 --> 00:06:57,579 Suze: I like him so much. I can't tell you this kid. 94 00:06:57,760 --> 00:07:00,299 Suze: I also like his brother Alex, but I like them 95 00:07:00,309 --> 00:07:02,790 Suze: all fabulous kids. And 96 00:07:03,359 --> 00:07:07,549 Suze: I told Nicholas to buy a specific stock a while 97 00:07:07,559 --> 00:07:10,980 Suze: ago and the stock happened to be pretty high. It 98 00:07:10,989 --> 00:07:14,859 Suze: was actually at $240 a share when I told him 99 00:07:15,540 --> 00:07:20,000 Suze: and I said, but Nicholas, as the stock goes down, 100 00:07:20,309 --> 00:07:24,540 Suze: you have to buy more. So only invest a little 101 00:07:24,549 --> 00:07:28,559 Suze: and then as it continues down, if it does go down, 102 00:07:28,570 --> 00:07:31,799 Suze: you'll put more in it. Well, that stock did, it 103 00:07:31,809 --> 00:07:36,239 Suze: continued down to about $140 a share. 104 00:07:37,160 --> 00:07:40,339 Suze: And so the other day I texted Nicholas because now 105 00:07:40,350 --> 00:07:42,059 Suze: it's back up to 220. 106 00:07:42,790 --> 00:07:46,170 Suze: And I was like, Nicholas, how much money now have 107 00:07:46,179 --> 00:07:50,609 Suze: you made on this stock? And essentially, he said, I didn't, 108 00:07:50,619 --> 00:07:54,029 Suze: I bought it at 240. And I said, well, why 109 00:07:54,040 --> 00:07:56,700 Suze: didn't you continue buying it more as it went down? 110 00:07:56,709 --> 00:08:00,450 Suze: And he said, because I didn't have any more money 111 00:08:00,459 --> 00:08:02,970 Suze: to invest. That's all I had. 112 00:08:03,829 --> 00:08:07,940 Suze: So I gave Nicholas a formula which is a formula 113 00:08:07,950 --> 00:08:11,730 Suze: for all of you to follow from this point on 114 00:08:11,970 --> 00:08:16,130 Suze: if you haven't been dollar cost averaging and again, dollar 115 00:08:16,140 --> 00:08:19,529 Suze: cost averaging is where you take a specific sum of 116 00:08:19,540 --> 00:08:24,040 Suze: dollars and you invest it month in or every three 117 00:08:24,049 --> 00:08:27,130 Suze: months into whatever you are investing in. 118 00:08:27,769 --> 00:08:29,480 Suze: So I said, all right, here's what we're gonna do 119 00:08:29,489 --> 00:08:33,869 Suze: from now on Nicholas, let's say you're going to buy something, 120 00:08:34,119 --> 00:08:37,340 Suze: doesn't matter what you buy, you're gonna buy something and 121 00:08:37,349 --> 00:08:43,169 Suze: you know that maybe you have $1200 to invest totally. 122 00:08:43,179 --> 00:08:46,510 Suze: And that's it. You don't have any more than that. 123 00:08:47,299 --> 00:08:52,390 Suze: Therefore, when you invest, you are only going to invest 124 00:08:52,400 --> 00:08:58,469 Suze: $300 of that $1200. You are not gonna buy $1200 125 00:08:58,479 --> 00:09:00,718 Suze: worth of whatever you're going to buy, you're gonna buy 126 00:09:00,729 --> 00:09:02,469 Suze: $300 worth of it. 127 00:09:03,309 --> 00:09:06,590 Suze: And then three months later, especially if the stock is 128 00:09:06,599 --> 00:09:09,770 Suze: going down or whenever you see the stock going down, 129 00:09:09,780 --> 00:09:13,130 Suze: especially if it's going down big, you're going to buy 130 00:09:13,140 --> 00:09:14,950 Suze: $300 more. 131 00:09:15,609 --> 00:09:20,228 Suze: Then a few months later, you're gonna buy $300 more. 132 00:09:21,049 --> 00:09:24,510 Suze: And then maybe after a year, you will put in 133 00:09:24,520 --> 00:09:28,690 Suze: the last $300 whether it goes up, whether it goes down, 134 00:09:28,700 --> 00:09:33,169 Suze: that is how you are going to invest. Because if 135 00:09:33,179 --> 00:09:37,539 Suze: Nicholas had done that, he actually, rather than being down 136 00:09:37,549 --> 00:09:42,109 Suze: $20 a share right now, he would be up significantly. 137 00:09:42,880 --> 00:09:47,968 Suze: So it's important that you understand, you never just buy 138 00:09:47,979 --> 00:09:51,219 Suze: number one, 1 stock and nothing else, which I talked 139 00:09:51,229 --> 00:09:54,218 Suze: about a while ago, but you never put all of 140 00:09:54,229 --> 00:09:58,109 Suze: your money that you're investing in that one stock at 141 00:09:58,119 --> 00:09:59,419 Suze: one time. 142 00:10:00,359 --> 00:10:03,760 Suze: Now, how do you know when it's time to sell? 143 00:10:04,650 --> 00:10:08,429 Suze: You have to ask a question to yourself and many 144 00:10:08,440 --> 00:10:12,059 Suze: of you who have purchased Devon over the years are 145 00:10:12,070 --> 00:10:16,270 Suze: writing me and saying, Suze, should I sell Devon, which 146 00:10:16,280 --> 00:10:19,260 Suze: is an energy company. Should I get out? The dividend 147 00:10:19,270 --> 00:10:23,429 Suze: has gone down. Number one, I cannot tell you what 148 00:10:23,440 --> 00:10:28,348 Suze: to do because I do not know your individual situations. 149 00:10:28,359 --> 00:10:31,429 Suze: I do not know your tax brackets. I do not 150 00:10:31,440 --> 00:10:34,098 Suze: know anything about you. 151 00:10:34,880 --> 00:10:40,000 Suze: Therefore, you need to ask yourself this question if you're 152 00:10:40,010 --> 00:10:44,280 Suze: even asking me, should you sell? It's because you want 153 00:10:44,289 --> 00:10:49,270 Suze: to sell because you're not happy. That's number one, number two, 154 00:10:49,960 --> 00:10:55,219 Suze: let's say you look at Devon's stock and whatever it's 155 00:10:55,229 --> 00:10:58,549 Suze: worth right now, you look at the cash value of 156 00:10:58,559 --> 00:11:02,010 Suze: it and let's just say right now, the cash value 157 00:11:02,020 --> 00:11:06,699 Suze: of it if you were to sell is $10,000. Ok. 158 00:11:06,820 --> 00:11:08,219 Suze: Listen to me closely. Now, 159 00:11:09,090 --> 00:11:11,809 Suze: you are to ask yourself the question. If you didn't 160 00:11:11,820 --> 00:11:13,109 Suze: own that stock. 161 00:11:13,969 --> 00:11:19,859 Suze: If you had $10,000 in cash, you didn't own Devon yet. 162 00:11:19,890 --> 00:11:26,218 Suze: Would you take that $10,000? And would you buy Devon today? 163 00:11:27,210 --> 00:11:31,390 Suze: If the answer to that question is no, I would not. 164 00:11:31,450 --> 00:11:35,880 Suze: I want you to sell Devon just that simple. If 165 00:11:35,890 --> 00:11:40,069 Suze: the answer to that question is yes, I would still 166 00:11:40,080 --> 00:11:44,950 Suze: buy Devon. Then keep what you have. If the answer 167 00:11:44,960 --> 00:11:47,909 Suze: to that question is, I don't know what I would do, 168 00:11:47,919 --> 00:11:51,950 Suze: then sell half. You do not have to be what 169 00:11:51,960 --> 00:11:56,140 Suze: I call all or nothing investors. 170 00:11:57,090 --> 00:12:01,030 Suze: If you're out there, let's just say you are because 171 00:12:01,039 --> 00:12:03,000 Suze: I want to give you an example of dollar cost 172 00:12:03,010 --> 00:12:06,030 Suze: averaging and I might as well do it with Devon's 173 00:12:06,039 --> 00:12:11,390 Suze: stock is that, let's just say in June of 2022. 174 00:12:12,229 --> 00:12:15,349 Suze: It was the first time you heard me say, buy Devon, 175 00:12:15,359 --> 00:12:17,750 Suze: like the dividend, whatever, buy it. 176 00:12:18,469 --> 00:12:21,669 Suze: And let's say that you decided you were going to 177 00:12:21,679 --> 00:12:24,250 Suze: buy 50 shares 178 00:12:25,400 --> 00:12:29,559 Suze: every three months. Because back then, if you remember, I 179 00:12:29,570 --> 00:12:32,869 Suze: told all of you, if you're gonna dollar cost average, 180 00:12:32,880 --> 00:12:37,150 Suze: let's switch from dollar cost averaging every month to every 181 00:12:37,159 --> 00:12:38,250 Suze: three months. 182 00:12:39,349 --> 00:12:44,340 Suze: So let's say from June 2022 all the way till 183 00:12:44,349 --> 00:12:50,650 Suze: right about now, every three months, you bought 50 shares 184 00:12:50,659 --> 00:12:57,010 Suze: of Devon. Now during that entire time between now and essentially, 185 00:12:57,020 --> 00:12:57,689 Suze: then 186 00:12:58,830 --> 00:13:07,659 Suze: Devon has paid out to you approximately $4176 in dividends. 187 00:13:08,369 --> 00:13:13,080 Suze: Because whenever you own a stock that pays dividends, it's 188 00:13:13,090 --> 00:13:16,699 Suze: paying you. So you have to take the fact into 189 00:13:16,710 --> 00:13:21,679 Suze: consideration that you got money during the years that you 190 00:13:21,690 --> 00:13:22,340 Suze: owned it. 191 00:13:22,960 --> 00:13:29,460 Suze: And over those years, you bought approximately 450 shares for 192 00:13:29,469 --> 00:13:35,539 Suze: a total cost of about $25,000. Totally. All right. 193 00:13:36,309 --> 00:13:42,409 Suze: Therefore, your average cost right now in Devon would be 194 00:13:42,419 --> 00:13:48,319 Suze: about $47.72 once you have minus 195 00:13:49,049 --> 00:13:54,710 Suze: the $4176 in dividends from your original amount of money 196 00:13:54,719 --> 00:13:59,710 Suze: that you purchased as I speak to you right now, 197 00:14:00,030 --> 00:14:03,989 Suze: Devon is about $40 a share. 198 00:14:04,690 --> 00:14:09,270 Suze: So in reality, you're not down that much money if 199 00:14:09,280 --> 00:14:10,729 Suze: you think about it. 200 00:14:11,700 --> 00:14:15,280 Suze: So there's a big difference. Do you see, if you 201 00:14:15,289 --> 00:14:19,679 Suze: simply had bought Devon in June of 22 which was 202 00:14:19,690 --> 00:14:25,919 Suze: its high at 75. You never purchased it again. After that, 203 00:14:26,530 --> 00:14:31,030 Suze: you would be down $35 a share, 204 00:14:31,729 --> 00:14:34,630 Suze: which is 46%. 205 00:14:35,679 --> 00:14:41,260 Suze: So Devon would have to go up 85% from where 206 00:14:41,270 --> 00:14:46,140 Suze: it is right now. Just for you to break even. 207 00:14:47,450 --> 00:14:52,229 Suze: That is why it is essential that you dollar cost 208 00:14:52,239 --> 00:14:57,849 Suze: average into something. Because otherwise that's a lot for a 209 00:14:57,859 --> 00:14:59,909 Suze: stock to have to go up. 210 00:15:00,989 --> 00:15:06,469 Suze: Remember when something goes from 100 to 50 right? That's 211 00:15:06,479 --> 00:15:10,599 Suze: a 50% decline. But to go from 50 back up 212 00:15:10,609 --> 00:15:14,289 Suze: to 100 is 100% increase. 213 00:15:15,169 --> 00:15:19,840 Suze: So when something is going down, you have to participate 214 00:15:19,849 --> 00:15:23,140 Suze: in its decline. And if you're just holding it and 215 00:15:23,150 --> 00:15:28,150 Suze: doing nothing, you're gonna find yourself in a situation possibly 216 00:15:28,570 --> 00:15:32,750 Suze: where maybe you did buy Devon in June of 2022 217 00:15:32,760 --> 00:15:34,539 Suze: and you're still holding it. 218 00:15:34,919 --> 00:15:37,799 Suze: So, what do you do now? You are to ask 219 00:15:37,809 --> 00:15:41,400 Suze: yourselves the questions that I just asked you. There are 220 00:15:41,409 --> 00:15:45,239 Suze: many things out there that if you sold, especially if 221 00:15:45,250 --> 00:15:48,169 Suze: it is outside of a retirement account, you could take 222 00:15:48,179 --> 00:15:52,940 Suze: the loss of your taxes, you could do many things 223 00:15:52,950 --> 00:15:57,460 Suze: with the money that's actually paid higher dividends right now. 224 00:15:58,109 --> 00:16:02,419 Suze: So just something for you to think about. All right 225 00:16:03,049 --> 00:16:06,429 Suze: now, I'm sure you're saying, well, Suze, if I sell, 226 00:16:06,440 --> 00:16:10,210 Suze: what other stock could I go into if I don't 227 00:16:10,219 --> 00:16:12,059 Suze: want to buy an index fund? I don't want to 228 00:16:12,070 --> 00:16:14,820 Suze: buy that. I just want to buy another stock that 229 00:16:14,830 --> 00:16:20,320 Suze: pays me a really great dividend. I'm starting to think 230 00:16:20,359 --> 00:16:27,799 Suze: that Whirlpool WHR might be a good investment for dollar cost. Averaging. 231 00:16:27,809 --> 00:16:31,229 Suze: It's about $107 a share right now 232 00:16:31,859 --> 00:16:38,099 Suze: because it's paying about a 6.53% dividend yield, which is 233 00:16:38,109 --> 00:16:41,679 Suze: a fabulous yield. But let me tell you why. And 234 00:16:41,690 --> 00:16:44,719 Suze: I could be so wrong on this. I can't tell you. 235 00:16:44,979 --> 00:16:47,460 Suze: So you're gonna have to do your research and decide 236 00:16:47,469 --> 00:16:49,599 Suze: if you agree with me or not 237 00:16:50,250 --> 00:16:55,309 Suze: is that there were thousands and thousands of homes in 238 00:16:55,320 --> 00:16:59,450 Suze: the past two hurricanes and the floods and the tornadoes 239 00:16:59,460 --> 00:17:03,179 Suze: and everything that has been happening that have been destroyed 240 00:17:03,760 --> 00:17:10,000 Suze: and all those appliances within all those homes were also destroyed. 241 00:17:10,479 --> 00:17:12,869 Suze: And I personally think, you know what, 242 00:17:13,920 --> 00:17:19,229 Suze: probably those appliances are going to have to be replaced 243 00:17:19,489 --> 00:17:23,959 Suze: and when somebody thinks about replacing an appliance or whatever, 244 00:17:23,969 --> 00:17:30,500 Suze: they usually think about Whirlpool appliances with that type of recognition. 245 00:17:31,130 --> 00:17:34,430 Suze: So I'm willing to kind of think, you know what, 246 00:17:34,939 --> 00:17:41,140 Suze: maybe just maybe Whirlpool might be a great place for 247 00:17:41,150 --> 00:17:42,659 Suze: a good dividend yield. 248 00:17:43,589 --> 00:17:46,129 Suze: And if we just have to wait for a while 249 00:17:46,140 --> 00:17:50,069 Suze: to see what the stock does again, we're being paid 250 00:17:50,079 --> 00:17:56,290 Suze: to wait. So that's just a thought for you. However, 251 00:17:56,300 --> 00:18:01,449 Suze: I also want to talk to you about where we 252 00:18:01,459 --> 00:18:04,489 Suze: are right now in the stock market. 253 00:18:05,439 --> 00:18:07,119 Suze: As of last Friday, 254 00:18:07,989 --> 00:18:13,219 Suze: the Standard and Poor's 500 index closed at its all 255 00:18:13,250 --> 00:18:17,719 Suze: time high in the entire history of the standard and 256 00:18:17,729 --> 00:18:23,219 Suze: Poor's 500 index, it closed, the number it closed at 257 00:18:23,229 --> 00:18:25,800 Suze: and I want you to write these down. So you 258 00:18:25,810 --> 00:18:28,089 Suze: have comparisons for yourself 259 00:18:28,630 --> 00:18:31,438 Suze: when you hear these numbers, you know, is it up, 260 00:18:31,449 --> 00:18:35,139 Suze: is it down? You know, it's all time high now 261 00:18:35,150 --> 00:18:48,689 Suze: is 5864. The Dow Jones industrial average closed at 43,275. So, 262 00:18:48,699 --> 00:18:51,969 Suze: you know what's funny is I will never forget obviously 263 00:18:51,979 --> 00:18:55,410 Suze: being a financial advisor, stockbroker at Merrill Lynch 264 00:18:56,030 --> 00:19:02,050 Suze: and the Dow Jones industrial average in 1980 was all 265 00:19:02,060 --> 00:19:04,579 Suze: over the place. It was like at, I think it 266 00:19:04,589 --> 00:19:08,099 Suze: started the year at about 800 right in there at 267 00:19:08,109 --> 00:19:11,050 Suze: the end of the year, we were all so excited 268 00:19:11,060 --> 00:19:13,379 Suze: because it ended the year. I'll never forget this at 269 00:19:13,390 --> 00:19:18,329 Suze: about 964. It almost hit 1000 270 00:19:18,699 --> 00:19:22,829 Suze: 1000. The Dow Jones industrial average. Remember I just told 271 00:19:22,839 --> 00:19:26,069 Suze: you it was at 43,000 the other day when it closed. 272 00:19:26,640 --> 00:19:30,890 Suze: And what was so fascinating is that we are like, 273 00:19:30,900 --> 00:19:34,520 Suze: come on, come on, come on. And then there it 274 00:19:34,530 --> 00:19:40,900 Suze: was in really early in 1981 where it broke 1000 275 00:19:40,910 --> 00:19:44,879 Suze: several times and then it retreated and things like that. 276 00:19:45,060 --> 00:19:49,380 Suze: But then it started to increase and increase and increase. 277 00:19:49,829 --> 00:19:50,670 Suze: But we were 278 00:19:50,714 --> 00:19:54,813 Suze: all so excited as if, oh my God. Can you 279 00:19:54,824 --> 00:19:58,875 Suze: believe it's going into four digits? And I'll never forget 280 00:19:58,885 --> 00:20:01,364 Suze: reading this book. I forget by the name of who 281 00:20:01,375 --> 00:20:04,814 Suze: it was. That one day, the Dow Jones Industrial Average 282 00:20:04,824 --> 00:20:09,494 Suze: was gonna be 25,000. And I'm like, yeah, and I'll 283 00:20:09,505 --> 00:20:14,655 Suze: buy you a bridge and here we are at 43,000, 284 00:20:15,280 --> 00:20:22,948 Suze: the NASDAQ closed at 18,483. And just for curiosity's sake, 285 00:20:23,209 --> 00:20:28,780 Suze: the 10 year Treasury was at 4.073%. And Bitcoin 286 00:20:29,680 --> 00:20:34,060 Suze: is at 68,418. 287 00:20:34,920 --> 00:20:39,709 Suze: So why am I telling you this? Because it's really, 288 00:20:39,719 --> 00:20:46,030 Suze: really important that you understand the differences between all of 289 00:20:46,040 --> 00:20:50,949 Suze: these indexes? So you kind of understand where you should 290 00:20:50,959 --> 00:20:56,688 Suze: be investing, especially in your 401k. So let's just do 291 00:20:56,699 --> 00:20:57,869 Suze: a very brief 292 00:20:58,239 --> 00:21:03,550 Suze: education. And what are the differences? Because I tell you 293 00:21:03,560 --> 00:21:06,760 Suze: these indexes are at that and you're, I'm sure thinking, well, 294 00:21:06,829 --> 00:21:12,270 Suze: what's in those indexes? Why are there so many different indexes? 295 00:21:12,609 --> 00:21:15,410 Suze: And therefore, what does Suze want me to know about 296 00:21:15,420 --> 00:21:20,979 Suze: those indexes? So I'm gonna tell you right now. So again, 297 00:21:21,359 --> 00:21:28,020 Suze: the Dow Jones Industrial Average simply consist of 30 large 298 00:21:28,030 --> 00:21:33,859 Suze: publicly owned companies. Now, even though I know that its 299 00:21:33,869 --> 00:21:37,619 Suze: name is the Dow Jones Industrial Average, 300 00:21:38,079 --> 00:21:44,770 Suze: it no longer just includes industrial companies, right. So in 301 00:21:44,780 --> 00:21:49,449 Suze: order to be listed in there, the companies are selected 302 00:21:49,459 --> 00:21:52,959 Suze: and based on their reputation, their sustained growth, all this 303 00:21:52,969 --> 00:21:57,290 Suze: kind of stuff. So that is an index that's made 304 00:21:57,300 --> 00:22:01,810 Suze: up of only 30 large publicly owned companies. Now, I 305 00:22:01,819 --> 00:22:03,020 Suze: stress that 306 00:22:04,000 --> 00:22:10,209 Suze: because 30 companies doesn't necessarily say a whole lot about 307 00:22:10,219 --> 00:22:12,109 Suze: the entire stock market. 308 00:22:13,050 --> 00:22:18,520 Suze: So a more popular index today, in my opinion is 309 00:22:18,530 --> 00:22:24,948 Suze: the Standard and Poor's 500 Index and that index tracks 310 00:22:24,959 --> 00:22:32,929 Suze: 500 of the largest US companies. So 500 companies sounds 311 00:22:32,939 --> 00:22:38,469 Suze: like a lot, right, everybody. But that's only about 75% 312 00:22:39,010 --> 00:22:42,829 Suze: of all the stocks that are listed on the US 313 00:22:42,839 --> 00:22:44,069 Suze: stock market. 314 00:22:44,920 --> 00:22:48,000 Suze: All right, especially in terms of the value of the 315 00:22:48,010 --> 00:22:52,800 Suze: entire stock market for a company to be listed on 316 00:22:52,810 --> 00:22:58,310 Suze: the Standard and Poor's 500 Index. Those companies again have 317 00:22:58,319 --> 00:23:00,800 Suze: to obviously meet certain criteria 318 00:23:01,500 --> 00:23:05,800 Suze: and they have to be based in the United States 319 00:23:06,150 --> 00:23:09,619 Suze: and they have to have a market cap. So what 320 00:23:09,630 --> 00:23:14,380 Suze: is their company work? What is the market capitalization of 321 00:23:14,390 --> 00:23:21,040 Suze: their company? And it has to exceed $18 billion. So 322 00:23:21,050 --> 00:23:25,569 Suze: the companies on the Standard and Poor's 500 Index are 323 00:23:25,579 --> 00:23:27,780 Suze: large companies 324 00:23:28,130 --> 00:23:30,989 Suze: and they also have to demonstrate the fact that they 325 00:23:31,140 --> 00:23:35,310 Suze: can have positive earnings over specific times that they are 326 00:23:35,319 --> 00:23:38,020 Suze: good quality stocks. 327 00:23:38,709 --> 00:23:46,579 Suze: The NASDAQ is an index that really includes about 2500 328 00:23:46,589 --> 00:23:51,949 Suze: companies that are listed on the NASDAQ stock exchange and 329 00:23:51,959 --> 00:23:58,369 Suze: they're heavily weighted towards technology companies. All right, everybody, you 330 00:23:58,380 --> 00:24:01,520 Suze: just need to know that. Also, I'm just gonna throw 331 00:24:01,530 --> 00:24:05,109 Suze: this in for you. There is another index called the 332 00:24:05,119 --> 00:24:07,329 Suze: Russell 2000 index 333 00:24:07,810 --> 00:24:15,270 Suze: which tracks 2000 small cap, meaning they're very small us companies. Now, 334 00:24:15,770 --> 00:24:20,540 Suze: what's important for you to know is how have these 335 00:24:20,550 --> 00:24:25,729 Suze: indexes done if you had simply invested in the index 336 00:24:25,739 --> 00:24:29,669 Suze: and simply the index, how would you have done 337 00:24:30,319 --> 00:24:32,250 Suze: over this past year? 338 00:24:33,089 --> 00:24:36,280 Suze: So if you simply invested in the Standard and Poor's 339 00:24:36,290 --> 00:24:42,399 Suze: 500 Index, you would be up approximately 23%. The Dow 340 00:24:42,410 --> 00:24:48,140 Suze: Jones Industrial Average, you'd be up about 14.8%. The NASDAQ, 341 00:24:48,150 --> 00:24:51,790 Suze: you would be up about 23.2%. 342 00:24:52,469 --> 00:24:55,030 Suze: And the Russell index, by the way, if you happen 343 00:24:55,040 --> 00:24:59,688 Suze: to invest in that, you'd be up 12.3%. 344 00:25:00,800 --> 00:25:04,540 Suze: So what's important again, going back to the beginning of 345 00:25:04,550 --> 00:25:09,660 Suze: this podcast, which is if you've missed in the individual 346 00:25:09,670 --> 00:25:12,420 Suze: stocks that have been named over the past year or 347 00:25:12,430 --> 00:25:17,989 Suze: whatever you want. More diversification, as I've said it over 348 00:25:18,000 --> 00:25:19,339 Suze: and over again. 349 00:25:19,650 --> 00:25:25,030 Suze: There is nothing wrong with simply dollar cost averaging in 350 00:25:25,449 --> 00:25:32,729 Suze: to an index fund or ETF just that simple, everybody, 351 00:25:33,109 --> 00:25:36,349 Suze: I mean, who in the world would be upset with 352 00:25:36,359 --> 00:25:41,859 Suze: the return of approximately 23% now. Yes, I know. Maybe 353 00:25:41,869 --> 00:25:44,589 Suze: you could have just bought NVIDIA, maybe you could have 354 00:25:44,599 --> 00:25:48,150 Suze: bought something else and you'd be up 1000% or whatever. 355 00:25:48,250 --> 00:25:53,589 Suze: But when you are buying individual stocks, I personally believe 356 00:25:53,599 --> 00:25:58,958 Suze: you need serious guidance. What to buy when to buy 357 00:25:58,969 --> 00:26:04,170 Suze: it all of those things. So it's important that if 358 00:26:04,180 --> 00:26:07,189 Suze: you don't have that guidance, if you don't know what 359 00:26:07,199 --> 00:26:13,180 Suze: to do that, you simply look at indexes next question. 360 00:26:13,270 --> 00:26:18,099 Suze: All right, Suze, so which index would you buy 361 00:26:18,579 --> 00:26:23,089 Suze: now? Very recently, I did a comparison for all of you. 362 00:26:23,099 --> 00:26:26,239 Suze: And just again, so, you know, I like exchange traded 363 00:26:26,250 --> 00:26:30,069 Suze: funds more than I like mutual funds. If you're in 364 00:26:30,079 --> 00:26:33,149 Suze: a retirement account, all you can do is buy, most 365 00:26:33,160 --> 00:26:35,629 Suze: likely mutual funds don't have a problem with that. 366 00:26:36,420 --> 00:26:42,270 Suze: But outside of retirement accounts, I like exchange traded funds 367 00:26:42,449 --> 00:26:45,310 Suze: that trade like stocks on the stock market, you can 368 00:26:45,319 --> 00:26:49,280 Suze: buy and sell them any time versus a mutual fund 369 00:26:49,290 --> 00:26:52,369 Suze: that can only be bought or sold at the end 370 00:26:52,380 --> 00:26:56,359 Suze: of business for the market that day. So just so, 371 00:26:56,369 --> 00:27:01,280 Suze: you know, so I did this in depth comparison between 372 00:27:01,699 --> 00:27:06,560 Suze: the ETF VOO - VOO, which is the Vanguard Standard 373 00:27:06,569 --> 00:27:12,000 Suze: and Poor's 500 ETF and the Spider S and P 374 00:27:12,010 --> 00:27:17,560 Suze: 500 ETF symbol SPY. 375 00:27:18,199 --> 00:27:20,729 Suze: And if you go back, you can listen to it. 376 00:27:20,949 --> 00:27:27,020 Suze: And my conclusion was I liked VOO - VOO better 377 00:27:27,630 --> 00:27:31,959 Suze: than the SPY. It's just a little better. It's not 378 00:27:31,969 --> 00:27:35,560 Suze: a big deal. If you're invested in the spy ETF 379 00:27:35,569 --> 00:27:39,540 Suze: fine versus VOO, don't have a problem with that. 380 00:27:39,770 --> 00:27:45,030 Suze: But VOO comes out just a little tiny bit ahead, 381 00:27:45,270 --> 00:27:48,910 Suze: like 1/10 of a percent. Then the Standard and Poor's 382 00:27:48,920 --> 00:27:54,119 Suze: 500 ETF. So a lot of you then wrote in 383 00:27:54,130 --> 00:27:57,550 Suze: and you said, all right, Suze, for years, you've been 384 00:27:57,560 --> 00:28:02,599 Suze: saying to buy the Vanguard Total Stock market index, the 385 00:28:02,739 --> 00:28:04,420 Suze: symbol VTI 386 00:28:05,319 --> 00:28:09,270 Suze: versus anything else. And one of the reasons I was 387 00:28:09,280 --> 00:28:14,869 Suze: telling you that is because the Vanguard US Total Stock 388 00:28:14,880 --> 00:28:20,050 Suze: Market Index covers 100% of the stock market. 389 00:28:20,750 --> 00:28:25,479 Suze: So let's just briefly talk about the difference between the 390 00:28:25,489 --> 00:28:26,089 Suze: two 391 00:28:26,839 --> 00:28:33,438 Suze: and their returns. So just follow along again, I just 392 00:28:33,449 --> 00:28:43,569 Suze: said VTI holds approximately 3500 stocks which includes small mid 393 00:28:43,579 --> 00:28:51,699 Suze: and large cap companies. VOO holds approximately 500 stocks simply 394 00:28:51,709 --> 00:28:54,949 Suze: focusing on large cap companies. 395 00:28:55,290 --> 00:29:00,869 Suze: So VTI is going to offer you broader market exposure 396 00:29:00,880 --> 00:29:10,449 Suze: than VOO. However, VOO has slightly outperformed VTI really over 397 00:29:10,459 --> 00:29:14,949 Suze: many different time periods. So let's just go back 10 years. 398 00:29:15,660 --> 00:29:18,069 Suze: VOO's average annual return 399 00:29:18,430 --> 00:29:27,010 Suze: is 12.61% versus VTI is 12.07%. 400 00:29:27,829 --> 00:29:36,979 Suze: So essentially VOO has outperformed VTI by about 0.53% annually 401 00:29:36,989 --> 00:29:42,890 Suze: since 2014, I could go on and on with it. 402 00:29:43,819 --> 00:29:48,050 Suze: But if you have to pick one or the other, 403 00:29:48,510 --> 00:29:52,530 Suze: then I would have to go with VOO. Now, 404 00:29:53,359 --> 00:29:58,680 Suze: I do think there is absolutely nothing wrong with any 405 00:29:58,689 --> 00:30:06,060 Suze: of those ETFs whether they're VIT, VOO, whether it's QQQ, what, 406 00:30:06,069 --> 00:30:07,619 Suze: whatever it may be, 407 00:30:08,329 --> 00:30:12,449 Suze: the point of the matter here is, you have got 408 00:30:12,459 --> 00:30:17,800 Suze: to be involved in investing in the stock markets at 409 00:30:17,810 --> 00:30:19,209 Suze: this point in time, 410 00:30:19,949 --> 00:30:24,209 Suze: whether they're going up more, whether they start to go down, 411 00:30:24,219 --> 00:30:28,209 Suze: whatever it is over, the majority of the time 412 00:30:28,959 --> 00:30:32,579 Suze: markets tend to go up more than they tend to 413 00:30:32,589 --> 00:30:35,420 Suze: go down. Therefore, 414 00:30:36,209 --> 00:30:40,910 Suze: I want you to be dollar cost averaging and diversifying 415 00:30:40,920 --> 00:30:46,630 Suze: your money in index funds or index ETFs if you 416 00:30:46,640 --> 00:30:49,869 Suze: can't buy ETFs because you're in a retirement account 417 00:30:51,010 --> 00:30:55,530 Suze: and be involved in this market and don't be upset 418 00:30:55,540 --> 00:30:59,030 Suze: if you're not in individual stocks that maybe I named 419 00:30:59,040 --> 00:31:03,660 Suze: or I mentioned or whatever because again, I truly believe 420 00:31:03,670 --> 00:31:08,109 Suze: if you're going to be buying individual stocks, you need 421 00:31:08,119 --> 00:31:14,030 Suze: professional guidance because you have to know a whole lot 422 00:31:14,089 --> 00:31:17,349 Suze: about those individual stocks. 423 00:31:17,630 --> 00:31:20,920 Suze: And if you don't have that guidance, I rather see 424 00:31:20,930 --> 00:31:27,260 Suze: you truthfully in an index fund because making 15% a 425 00:31:27,270 --> 00:31:30,930 Suze: year or 12% a year or whatever it may be 426 00:31:31,829 --> 00:31:35,569 Suze: or even more is far better than making a few 427 00:31:35,579 --> 00:31:41,290 Suze: percent in your money market account or anything else. Obviously, 428 00:31:41,300 --> 00:31:47,130 Suze: for safe money, you wanna lock in certificates of deposits. 429 00:31:47,140 --> 00:31:50,839 Suze: I still like the interest rates at Alliant Credit Union. 430 00:31:51,020 --> 00:31:54,810 Suze: You might want to go to my alliant.com and check 431 00:31:54,819 --> 00:31:55,609 Suze: it out 432 00:31:55,890 --> 00:31:59,160 Suze: if you live in a high state income tax brackets, 433 00:31:59,170 --> 00:32:04,469 Suze: be looking at 3, 5 and seven year treasuries don't 434 00:32:04,479 --> 00:32:07,069 Suze: have a problem with you locking that in. And for 435 00:32:07,079 --> 00:32:09,000 Suze: those of you who do want to lock in a 436 00:32:09,010 --> 00:32:12,189 Suze: little higher interest rate, I don't have a problem with 437 00:32:12,199 --> 00:32:17,969 Suze: you doing small amounts in the 30 year treasury bond. 438 00:32:17,979 --> 00:32:24,709 Suze: All right. So that was quite the Suze school for today. 439 00:32:25,089 --> 00:32:28,869 Suze: So, until Thursday, when KT and I will be back 440 00:32:28,880 --> 00:32:34,250 Suze: with another KT and Suze anything. There's only one thing 441 00:32:34,260 --> 00:32:35,969 Suze: that I want you to remember when it comes to 442 00:32:35,979 --> 00:32:40,390 Suze: your money and it is this people first, then money, 443 00:32:40,400 --> 00:32:42,030 Suze: then things. 444 00:32:42,709 --> 00:32:46,310 Suze: And if you do that, you stay educated, you listen 445 00:32:46,319 --> 00:32:50,170 Suze: to a podcast like this over and over and over again. 446 00:32:50,300 --> 00:32:53,650 Suze: So you understand what I am trying to teach you. 447 00:32:53,819 --> 00:32:59,670 Suze: So you then become powerful enough to control your own destiny, 448 00:32:59,760 --> 00:33:04,689 Suze: then I promise you you will be unstoppable.