1 00:00:01,990 --> 00:00:02,929 Music: Music (in). 2 00:00:28,670 --> 00:00:34,029 Suze: July 2nd, 2023. Welcome everybody to the Women and Money 3 00:00:34,040 --> 00:00:40,659 Suze: podcast as well as everybody smart enough to listen. So 4 00:00:40,680 --> 00:00:43,310 Suze: in two days, it will be July 4th, 5 00:00:44,200 --> 00:00:47,409 Suze: July 4th, the day that we celebrate 6 00:00:48,380 --> 00:00:55,279 Suze: independence, independence of the United States of America and hopefully 7 00:00:55,290 --> 00:01:01,250 Suze: independence for every single one of us. One of the 8 00:01:01,259 --> 00:01:07,429 Suze: greatest forms of independence. However, in my opinion, is financial 9 00:01:07,610 --> 00:01:15,150 Suze: independence because nothing can make you feel more dependent, more afraid, 10 00:01:15,160 --> 00:01:16,989 Suze: more insecure 11 00:01:17,279 --> 00:01:21,989 Suze: than not having the money to pay your bills knowing 12 00:01:22,000 --> 00:01:25,879 Suze: you won't have enough money to be allowed to retire, 13 00:01:25,989 --> 00:01:29,569 Suze: knowing that you don't have enough money to possibly help 14 00:01:29,580 --> 00:01:34,150 Suze: your kids pay for their college education, not having enough 15 00:01:34,160 --> 00:01:37,860 Suze: money to pay for your health care needs. If you 16 00:01:37,870 --> 00:01:41,510 Suze: happen to get ill, not having enough money to pay 17 00:01:41,519 --> 00:01:44,809 Suze: for your cars and your homes when they break down, 18 00:01:44,819 --> 00:01:47,029 Suze: not having enough money. 19 00:01:47,970 --> 00:01:52,629 Suze: In my opinion, is one of the greatest forms of 20 00:01:52,639 --> 00:01:57,889 Suze: the lack of independence there can possibly be because when 21 00:01:57,900 --> 00:02:00,489 Suze: you are not financially independent, 22 00:02:01,230 --> 00:02:07,360 Suze: you end up being dependent on either friends, family credit cards, 23 00:02:07,370 --> 00:02:11,600 Suze: payday loans, home equity lines of credit or whatever it 24 00:02:11,610 --> 00:02:12,880 Suze: may be. 25 00:02:13,919 --> 00:02:19,339 Suze: So every one of my shows or podcasts or talks 26 00:02:19,350 --> 00:02:20,729 Suze: that I have ever given 27 00:02:21,500 --> 00:02:27,029 Suze: the goal, the goal has been to lead you down 28 00:02:27,149 --> 00:02:32,410 Suze: the road to financial independence. Because once again, I will 29 00:02:32,419 --> 00:02:36,449 Suze: remind you what is the goal of money. The goal 30 00:02:36,460 --> 00:02:39,899 Suze: of money is for you to be secure. And when 31 00:02:39,910 --> 00:02:43,850 Suze: is it that you are secure, you are secure. When 32 00:02:43,860 --> 00:02:51,149 Suze: you feel financially independent and financially independent, doesn't just mean 33 00:02:51,699 --> 00:02:53,918 Suze: that you have enough money to pay your bills or 34 00:02:53,929 --> 00:02:58,388 Suze: retire or any of those things. It also means that 35 00:02:58,399 --> 00:03:02,059 Suze: you have the ability to be independent of the financial 36 00:03:02,070 --> 00:03:05,788 Suze: advice that anybody else gives you 37 00:03:06,440 --> 00:03:09,600 Suze: so that you call the shots. You know, if you're 38 00:03:09,610 --> 00:03:12,940 Suze: getting good advice, you know, if you're getting bad advice, 39 00:03:12,949 --> 00:03:18,009 Suze: you can be independent because you are financially powerful. 40 00:03:19,149 --> 00:03:22,478 Suze: And that is when you truly own the power to 41 00:03:22,490 --> 00:03:24,440 Suze: control your destiny, 42 00:03:25,270 --> 00:03:27,288 Suze: your financial destiny. 43 00:03:28,169 --> 00:03:35,500 Suze: So to be truly secure, to be truly financially independent means, 44 00:03:35,509 --> 00:03:38,690 Suze: you also not only have to have the money, but 45 00:03:38,699 --> 00:03:42,960 Suze: you have to know about the money that you have. 46 00:03:43,570 --> 00:03:48,210 Suze: And that brings me to an email that I got 47 00:03:48,330 --> 00:03:51,309 Suze: a little bit ago. Actually, I got this email on 48 00:03:51,369 --> 00:03:56,139 Suze: June 17th and it was from somebody by the name 49 00:03:56,149 --> 00:03:57,619 Suze: of Alex. 50 00:03:58,000 --> 00:04:01,880 Suze: And I want to read you his email 51 00:04:02,770 --> 00:04:06,110 Suze: and then I want to talk about this concept that 52 00:04:06,119 --> 00:04:10,149 Suze: he is addressing because believe it or not, it really 53 00:04:10,160 --> 00:04:14,259 Suze: has to do with financial independence. 54 00:04:15,199 --> 00:04:20,678 Suze: He says, Suze, I love your podcast. Yes, I am 55 00:04:20,690 --> 00:04:23,988 Suze: a man and yes, I soak up your woman and 56 00:04:24,000 --> 00:04:29,369 Suze: money podcast like a sponge. Remember everybody, the subtitle to 57 00:04:29,380 --> 00:04:34,209 Suze: this podcast is and everyone smart enough to listen. 58 00:04:35,390 --> 00:04:38,140 Suze: He goes on to say, I have to say you 59 00:04:38,149 --> 00:04:41,299 Suze: are dead on with most of your advice and I 60 00:04:41,309 --> 00:04:48,390 Suze: agree 99% with your recommendations. One thing that confuses me 61 00:04:48,399 --> 00:04:48,940 Suze: a bit 62 00:04:49,369 --> 00:04:54,130 Suze: and does not fit in your otherwise totally rational approach 63 00:04:54,190 --> 00:05:00,708 Suze: is your attitude towards mortgages. You repeatedly recommend to pay 64 00:05:00,720 --> 00:05:06,169 Suze: off outstanding mortgage loans as soon as financially feasible. And 65 00:05:06,178 --> 00:05:09,200 Suze: at least by the time of retirement, 66 00:05:10,040 --> 00:05:14,600 Suze: I'm 50 years old and retired about three years ago, 67 00:05:15,160 --> 00:05:20,029 Suze: I have a 15 year mortgage with 10 years left 68 00:05:20,040 --> 00:05:23,480 Suze: to pay off at a two and three quarters percent 69 00:05:23,488 --> 00:05:27,380 Suze: interest rate and will not even think about paying any 70 00:05:27,390 --> 00:05:32,450 Suze: penny more than my scheduled monthly payments. It 71 00:05:32,649 --> 00:05:36,099 Suze: not make any sense to put more of my money 72 00:05:36,109 --> 00:05:41,500 Suze: into the mortgage than required while the stock market and nowadays, 73 00:05:41,510 --> 00:05:47,980 Suze: even 100% safe government investments pay me 4% or more 74 00:05:47,988 --> 00:05:50,140 Suze: on my savings. Instead, 75 00:05:50,869 --> 00:05:56,059 Suze: I understand that some folks will get emotional about outstanding 76 00:05:56,070 --> 00:05:59,540 Suze: debt and will have trouble sleeping at night until they 77 00:05:59,549 --> 00:06:01,238 Suze: paid off their mortgage. 78 00:06:01,540 --> 00:06:06,089 Suze: I do not in capital letters, I do not have 79 00:06:06,100 --> 00:06:09,839 Suze: such fears. I have the cash to pay off my 80 00:06:09,850 --> 00:06:14,829 Suze: loan but well invested in very profitable assets and I'm 81 00:06:14,839 --> 00:06:18,428 Suze: going to pay off all of my loan in an instant. 82 00:06:18,440 --> 00:06:23,149 Suze: Should the interest rate situation change out of favor? I 83 00:06:23,160 --> 00:06:28,190 Suze: sleep very well at night if I regret anything. 84 00:06:28,690 --> 00:06:33,510 Suze: It's probably that I only opted for a 15 year 85 00:06:33,519 --> 00:06:38,368 Suze: loan instead of a 30 year loan back when interest 86 00:06:38,380 --> 00:06:39,829 Suze: rates were so low. 87 00:06:40,440 --> 00:06:44,109 Suze: I just wanted to clarify this. I am sure you 88 00:06:44,119 --> 00:06:49,178 Suze: will absolutely agree to this rational approach. It just doesn't 89 00:06:49,190 --> 00:06:52,679 Suze: always get across that clear when you talk about paying 90 00:06:52,690 --> 00:06:58,479 Suze: off mortgages or not. Yours, sincerely, Alex. I have to 91 00:06:58,488 --> 00:07:02,709 Suze: tell you, I loved this email from Alex and I 92 00:07:02,720 --> 00:07:05,670 Suze: wanted to just pull his strings for a little bit. 93 00:07:05,950 --> 00:07:10,380 Suze: I answered this email and I said, I absolutely disagree 94 00:07:10,390 --> 00:07:13,510 Suze: with you and I'll deal with this on a podcast. 95 00:07:14,160 --> 00:07:15,929 Suze: And then I let that sit with him for a 96 00:07:15,940 --> 00:07:16,640 Suze: little bit 97 00:07:17,309 --> 00:07:20,480 Suze: and then I wrote again and I said, but Alex, 98 00:07:20,489 --> 00:07:26,100 Suze: in your particular situation, I'm fine with you doing exactly 99 00:07:26,109 --> 00:07:28,000 Suze: what you are doing. 100 00:07:28,700 --> 00:07:33,690 Suze: But in honor of Alex, really caring and having done 101 00:07:33,700 --> 00:07:36,829 Suze: really so well with his money that he was able 102 00:07:36,839 --> 00:07:40,559 Suze: to retire at the age of 47 I wanted to 103 00:07:40,570 --> 00:07:45,410 Suze: number one honor him and I did wanna make it 104 00:07:45,420 --> 00:07:46,750 Suze: very clear 105 00:07:47,559 --> 00:07:51,809 Suze: because one of the greatest forms of financial independence is 106 00:07:51,820 --> 00:07:56,589 Suze: truly owning your own home outright. 107 00:07:57,190 --> 00:07:59,899 Suze: Now, to just be clear as to what I have 108 00:07:59,910 --> 00:08:04,279 Suze: always said is if you own a home 109 00:08:05,290 --> 00:08:08,250 Suze: and you know that you are going to stay in 110 00:08:08,260 --> 00:08:11,200 Suze: that home for the rest of your life, 111 00:08:12,339 --> 00:08:17,510 Suze: then you should probably make it your number one goal 112 00:08:17,519 --> 00:08:21,230 Suze: to have that home paid off by the time that 113 00:08:21,239 --> 00:08:23,390 Suze: you are retired. 114 00:08:24,489 --> 00:08:27,260 Suze: And one of the reasons that I have always said 115 00:08:27,269 --> 00:08:32,598 Suze: that is that not many people today. And when I talk, 116 00:08:32,609 --> 00:08:35,679 Suze: I have to talk to the majority of people I'm 117 00:08:35,690 --> 00:08:39,460 Suze: speaking to or who I know that are listening, not 118 00:08:39,469 --> 00:08:45,080 Suze: just those who are in a different financial situation, but 119 00:08:45,090 --> 00:08:49,539 Suze: their financial situation is typically in the minority. 120 00:08:50,140 --> 00:08:54,549 Suze: And in my opinion, it's really in the minority that 121 00:08:54,559 --> 00:09:00,090 Suze: somebody could retire at 47 years of age and have 122 00:09:00,099 --> 00:09:06,199 Suze: enough money outside of retirement accounts like Alex does that 123 00:09:06,210 --> 00:09:10,750 Suze: he could afford to just very easily pay off the 124 00:09:10,760 --> 00:09:15,390 Suze: mortgage on his home. If interest rates were to go down, 125 00:09:16,119 --> 00:09:21,250 Suze: very few people are in that type of financial situation. 126 00:09:22,049 --> 00:09:25,559 Suze: So let me just first address that 127 00:09:26,500 --> 00:09:29,429 Suze: it was back in 2008, 128 00:09:30,140 --> 00:09:36,270 Suze: 2007, 2006. Do you remember those years? 129 00:09:36,929 --> 00:09:41,200 Suze: And those were the years when real estate, especially 2005, 130 00:09:41,210 --> 00:09:46,380 Suze: 2004 real estate was skyrocketing. 131 00:09:47,150 --> 00:09:52,719 Suze: Absolutely skyrocketing and interest rates weren't so bad back then, 132 00:09:53,200 --> 00:09:59,719 Suze: but the stock market was absolutely skyrocketing as well. 133 00:10:00,849 --> 00:10:04,640 Suze: And I had people right into the Suze Orman show 134 00:10:04,650 --> 00:10:09,239 Suze: just like Alex because I've been giving this advice now 135 00:10:09,250 --> 00:10:14,039 Suze: for a long, long time, probably about 30 years or more. 136 00:10:14,799 --> 00:10:17,809 Suze: And they would say to me, Suze, 137 00:10:18,950 --> 00:10:23,330 Suze: I have my money invested in the stock market and 138 00:10:23,340 --> 00:10:27,369 Suze: I am making far more in the stock market now 139 00:10:27,380 --> 00:10:30,909 Suze: than I am making on the interest that I am 140 00:10:30,919 --> 00:10:35,809 Suze: paying on my home loan. In fact, it was back then. 141 00:10:35,820 --> 00:10:37,840 Suze: And I know I've said this before, but just in 142 00:10:37,849 --> 00:10:41,260 Suze: case for all the new listeners that have not listened 143 00:10:41,270 --> 00:10:45,229 Suze: to past podcasts, I was a question 144 00:10:45,479 --> 00:10:48,840 Suze: that was answered on one of the talk shows or 145 00:10:48,849 --> 00:10:52,210 Suze: one of the game shows and I can't even believe it. 146 00:10:52,219 --> 00:10:55,789 Suze: I can't remember what it was right now. But anyway, 147 00:10:56,080 --> 00:11:01,478 Suze: and they won a million dollars and they won by 148 00:11:01,489 --> 00:11:05,869 Suze: being able to answer the question and I was the 149 00:11:05,880 --> 00:11:07,729 Suze: answer to that question. 150 00:11:08,400 --> 00:11:12,880 Suze: So this person came on the Today Show with me. 151 00:11:12,890 --> 00:11:16,539 Suze: They called in, I was physically on the Today Show 152 00:11:16,679 --> 00:11:20,419 Suze: and I advised them to take their money because after 153 00:11:20,429 --> 00:11:25,030 Suze: their million dollar winning, maybe they would have $600,000 left. 154 00:11:25,039 --> 00:11:27,809 Suze: They had $400,000 left on their home. 155 00:11:28,650 --> 00:11:33,539 Suze: And my advice to them was pay off the mortgage 156 00:11:33,549 --> 00:11:35,640 Suze: on your home. 157 00:11:37,059 --> 00:11:40,409 Suze: The hate mail that came into the Today Show towards 158 00:11:40,419 --> 00:11:43,849 Suze: me saying that was the worst advice they have ever 159 00:11:43,859 --> 00:11:48,650 Suze: heard in their lives because this person who won this 160 00:11:48,659 --> 00:11:52,429 Suze: money could take that money invested in the stock market, 161 00:11:52,440 --> 00:11:56,909 Suze: get greater returns than what they would get. Having just 162 00:11:56,919 --> 00:11:59,469 Suze: simply paid off the mortgage on their home. 163 00:12:00,229 --> 00:12:02,820 Suze: And how could I tell them that? 164 00:12:04,330 --> 00:12:06,580 Suze: However, I did tell them that 165 00:12:07,419 --> 00:12:11,348 Suze: then a few years later this, the real estate market 166 00:12:12,059 --> 00:12:16,909 Suze: and the stock market absolutely crashed. 167 00:12:17,849 --> 00:12:21,939 Suze: And now this person, even though they didn't have the 168 00:12:21,950 --> 00:12:26,440 Suze: equity they once had in their home, they still had 169 00:12:26,450 --> 00:12:31,119 Suze: a home that they could live in because they paid 170 00:12:31,130 --> 00:12:32,739 Suze: off the mortgage 171 00:12:34,380 --> 00:12:38,909 Suze: if they had taken that money. And if they had 172 00:12:38,919 --> 00:12:42,309 Suze: listened and invested it in the stock market, 173 00:12:43,030 --> 00:12:47,719 Suze: they would have not only lost a considerable portion of 174 00:12:47,729 --> 00:12:51,530 Suze: that money in the stock market during those days, but 175 00:12:51,539 --> 00:12:56,000 Suze: they also would have lost tremendous value in their home 176 00:12:57,109 --> 00:13:00,169 Suze: and they probably would not have even been able to 177 00:13:00,179 --> 00:13:04,900 Suze: sell it for what they owed on their mortgage. If 178 00:13:04,909 --> 00:13:08,010 Suze: they had a job where they would have been able 179 00:13:08,020 --> 00:13:12,169 Suze: to pay at least the mortgage payment during those times, 180 00:13:12,179 --> 00:13:16,359 Suze: they most likely would have lost that job as well. 181 00:13:17,250 --> 00:13:22,140 Suze: And they would have been in serious, serious trouble. 182 00:13:23,630 --> 00:13:27,559 Suze: That isn't the only time I have seen that happen. 183 00:13:28,179 --> 00:13:32,679 Suze: I've seen that happen in California when real estate absolutely crashed. 184 00:13:32,690 --> 00:13:38,630 Suze: When all kinds of things have happened over the 40 years, 185 00:13:38,640 --> 00:13:39,989 Suze: I've been doing this. 186 00:13:41,000 --> 00:13:46,109 Suze: So I've always found that for me personally, true, financial 187 00:13:46,119 --> 00:13:52,130 Suze: security is just not getting the most out of every penny, 188 00:13:53,280 --> 00:13:58,130 Suze: but making sure that every penny is doing the most 189 00:13:58,140 --> 00:14:01,690 Suze: for me and for me personally, 190 00:14:02,590 --> 00:14:06,659 Suze: one of the things that makes me feel seriously secure 191 00:14:06,669 --> 00:14:13,580 Suze: is owning my own home outright. Now, obviously, maybe Alex, 192 00:14:13,590 --> 00:14:16,059 Suze: because now I'm talking to you, I'm in a different 193 00:14:16,070 --> 00:14:19,159 Suze: position than you. And why is that? Because I am 194 00:14:19,169 --> 00:14:23,619 Suze: sure I have far more wealth than you. 195 00:14:24,250 --> 00:14:26,750 Suze: Although I hope that's not true. I would love if 196 00:14:26,760 --> 00:14:30,690 Suze: you had more wealth than me. And even though I 197 00:14:30,700 --> 00:14:32,179 Suze: can make more, 198 00:14:32,909 --> 00:14:37,989 Suze: I want to feel more secure and I still like 199 00:14:38,000 --> 00:14:39,840 Suze: owning everything outright. 200 00:14:40,500 --> 00:14:44,039 Suze: And I can tell you that even though I have 201 00:14:44,049 --> 00:14:49,650 Suze: tens of millions of dollars that were in treasuries, there 202 00:14:49,659 --> 00:14:55,159 Suze: was a period of time there not so long ago when, 203 00:14:55,169 --> 00:14:59,250 Suze: in fact, the government was in doubt of paying their 204 00:14:59,260 --> 00:15:02,890 Suze: debt and what would happen to treasuries if they defaulted 205 00:15:02,900 --> 00:15:07,549 Suze: on their debt. I was not that secure 206 00:15:08,070 --> 00:15:11,570 Suze: because I didn't know what was really going to happen 207 00:15:11,580 --> 00:15:15,880 Suze: to treasuries. We hoped that everything was going to be ok. 208 00:15:15,890 --> 00:15:20,190 Suze: Sheila Bair, the old chairman of the FDIC told us 209 00:15:20,200 --> 00:15:21,830 Suze: everything would be ok. 210 00:15:22,460 --> 00:15:26,809 Suze: But I had thousands of emails of people who had 211 00:15:26,820 --> 00:15:31,390 Suze: money that they thought was invested, safe, secure and sound, 212 00:15:32,049 --> 00:15:34,659 Suze: that didn't feel that secure 213 00:15:35,330 --> 00:15:37,400 Suze: and they would write me and they would say Suze, 214 00:15:37,409 --> 00:15:39,609 Suze: all of my money that I was gonna use to 215 00:15:39,619 --> 00:15:43,940 Suze: pay off my mortgage. If I ever lost my job 216 00:15:44,080 --> 00:15:48,640 Suze: is invested in treasuries. Do you think it will be safe? 217 00:15:50,090 --> 00:15:54,780 Suze: So, of course I said, yeah, everybody tells me it will, 218 00:15:55,679 --> 00:16:03,010 Suze: but I can tell you everybody felt insecure about that happening. 219 00:16:03,919 --> 00:16:08,140 Suze: So all of us just have to take that always 220 00:16:08,150 --> 00:16:12,429 Suze: into consideration as well. You say that you understand that 221 00:16:12,440 --> 00:16:16,309 Suze: some folks will get emotional about outstanding debt and have 222 00:16:16,320 --> 00:16:19,799 Suze: trouble sleeping at night until they're paid off. And you 223 00:16:19,809 --> 00:16:23,590 Suze: say you do not have such fares that you have 224 00:16:23,599 --> 00:16:25,950 Suze: the cash to pay off your loan. 225 00:16:27,200 --> 00:16:34,929 Suze: So the question goes to where exactly is that cash kept? 226 00:16:35,469 --> 00:16:39,010 Suze: Because if in fact, it is in the stock market 227 00:16:39,690 --> 00:16:43,059 Suze: and if in fact, you feel that if something went on, 228 00:16:43,070 --> 00:16:46,580 Suze: you could get at that money right away, please remember 229 00:16:46,590 --> 00:16:49,099 Suze: that when catastrophes happen 230 00:16:49,890 --> 00:16:54,059 Suze: such as 9 11 and some other things can happen, 231 00:16:54,690 --> 00:16:59,840 Suze: the stock markets can close down so that you cannot 232 00:16:59,849 --> 00:17:04,319 Suze: sell anything and they can stay closed down for four 233 00:17:04,329 --> 00:17:08,599 Suze: or five days until they want to open up. And 234 00:17:08,609 --> 00:17:12,079 Suze: then when they open up, your stocks can open up 235 00:17:12,089 --> 00:17:16,869 Suze: so much lower than what you thought they were at 236 00:17:16,880 --> 00:17:20,979 Suze: when everything closed, that maybe you would not get back 237 00:17:21,229 --> 00:17:24,020 Suze: as much money as you thought you needed to get 238 00:17:24,030 --> 00:17:29,319 Suze: back to do what pay off the mortgage on your 239 00:17:29,329 --> 00:17:30,119 Suze: home 240 00:17:31,109 --> 00:17:34,479 Suze: So if you have money, everybody 241 00:17:35,290 --> 00:17:38,260 Suze: and you want to do what Alex has done 242 00:17:38,900 --> 00:17:43,790 Suze: and you happen to have a very low interest rate 243 00:17:43,920 --> 00:17:49,430 Suze: lower than what you are currently getting on the money 244 00:17:49,489 --> 00:17:54,849 Suze: that you may have in certificates of deposits and, or 245 00:17:54,859 --> 00:17:59,050 Suze: treasuries that you know, you can get at, at any time. 246 00:17:59,060 --> 00:18:00,948 Suze: They are not in 247 00:18:01,390 --> 00:18:06,119 Suze: a taxable retirement account. They are where you can get 248 00:18:06,130 --> 00:18:12,339 Suze: them without any tax ramification or surrender charge whatsoever. 249 00:18:13,109 --> 00:18:16,359 Suze: And you want to keep that money there 250 00:18:17,380 --> 00:18:19,369 Suze: earning more 251 00:18:20,189 --> 00:18:25,959 Suze: after taxes than what your interest rate on your mortgage 252 00:18:25,969 --> 00:18:33,319 Suze: is after taxes. Because remember everybody as time goes on, 253 00:18:34,199 --> 00:18:40,420 Suze: even if your mortgage is at two and three quarters percent, eventually, 254 00:18:40,890 --> 00:18:44,589 Suze: there will not be a tax write off or very 255 00:18:44,599 --> 00:18:48,469 Suze: much of a tax write off on that two and 256 00:18:48,479 --> 00:18:50,969 Suze: three quarter percent mortgage. 257 00:18:51,920 --> 00:18:57,280 Suze: As time goes on the interest deduction on your mortgage 258 00:18:57,290 --> 00:19:02,430 Suze: payment goes down and down and down. So you get 259 00:19:02,439 --> 00:19:05,750 Suze: less of a tax write off. So you have to 260 00:19:05,760 --> 00:19:09,169 Suze: be very careful because there will always come a time 261 00:19:09,849 --> 00:19:14,510 Suze: when it makes more sense if all you're doing is 262 00:19:14,520 --> 00:19:18,938 Suze: putting your money and getting safe interest. There always comes 263 00:19:18,949 --> 00:19:22,380 Suze: a time where it makes sense to still pay off 264 00:19:22,390 --> 00:19:26,540 Suze: the mortgage. Let me give you an example. Let's just say, 265 00:19:26,670 --> 00:19:28,810 Suze: and I don't know if this is true or not, 266 00:19:28,819 --> 00:19:32,609 Suze: but let's just say Alex had a $400,000 mortgage 267 00:19:33,109 --> 00:19:35,649 Suze: and he's paying like I said, two and three quarters 268 00:19:35,660 --> 00:19:39,520 Suze: percent and it was a 15 year mortgage. So his 269 00:19:39,530 --> 00:19:46,959 Suze: mortgage payments would be write this down everybody $2714 a month. 270 00:19:47,790 --> 00:19:52,140 Suze: And let's say he did that every single month for 271 00:19:52,150 --> 00:19:58,060 Suze: 13 years. At the end of 13 years, Alex, you're 272 00:19:58,069 --> 00:20:04,790 Suze: gonna only owe $58,000 right around there. Ok? But your 273 00:20:04,800 --> 00:20:08,790 Suze: interest right off at that point in time, just so, 274 00:20:08,800 --> 00:20:09,679 Suze: you know, 275 00:20:10,290 --> 00:20:16,489 Suze: will be about $1500 of interest for the whole year. 276 00:20:16,500 --> 00:20:18,639 Suze: And let's just say you're in a low tax bracket, 277 00:20:18,650 --> 00:20:22,900 Suze: a 20% tax bracket. So it will only save you 278 00:20:22,910 --> 00:20:28,729 Suze: $300 in taxes. So let's just say 279 00:20:29,010 --> 00:20:32,919 Suze: that you have that 58,000 sitting in a safe account, 280 00:20:32,930 --> 00:20:39,179 Suze: like you say, making 4% obviously taxable, you would earn 281 00:20:39,750 --> 00:20:42,719 Suze: $320 in interest on that 282 00:20:43,459 --> 00:20:49,569 Suze: in the 20% tax bracket. It would cost you $464 283 00:20:49,900 --> 00:20:51,569 Suze: in taxes. 284 00:20:52,349 --> 00:20:58,180 Suze: So you would actually be losing and $164 285 00:20:58,790 --> 00:21:04,069 Suze: on that example. So we can work numbers any way 286 00:21:04,079 --> 00:21:05,060 Suze: we want. 287 00:21:05,770 --> 00:21:09,459 Suze: But there usually always comes a time 288 00:21:10,119 --> 00:21:15,089 Suze: where it makes sense to pay off the mortgage on 289 00:21:15,099 --> 00:21:20,089 Suze: your home with cash that you have rather than just 290 00:21:20,099 --> 00:21:23,969 Suze: paying it out little by little by little. So again, 291 00:21:23,979 --> 00:21:29,149 Suze: just to be clear, everybody, if you have the money 292 00:21:29,160 --> 00:21:31,329 Suze: outside of a retirement account 293 00:21:31,949 --> 00:21:36,770 Suze: not in the stock market but in a safe, safe 294 00:21:36,780 --> 00:21:41,530 Suze: liquid place where you could get at it at any 295 00:21:41,540 --> 00:21:42,569 Suze: time 296 00:21:43,449 --> 00:21:48,199 Suze: and you rather earn the interest in there rather than 297 00:21:48,209 --> 00:21:51,619 Suze: paying off your home. I don't have a problem with that, 298 00:21:52,609 --> 00:21:55,709 Suze: but you just have to keep an eye on it 299 00:21:55,780 --> 00:21:59,978 Suze: for the majority of people though, most of your money 300 00:21:59,989 --> 00:22:02,319 Suze: is in a retirement account 301 00:22:03,010 --> 00:22:05,839 Suze: and most of your money is in a retirement account 302 00:22:05,849 --> 00:22:07,979 Suze: that is taxable. 303 00:22:08,829 --> 00:22:13,579 Suze: So that if you needed to, for whatever reason, pay 304 00:22:13,589 --> 00:22:16,319 Suze: off your mortgage right away 305 00:22:17,290 --> 00:22:21,319 Suze: to take it out of a taxable account makes absolutely 306 00:22:21,329 --> 00:22:23,020 Suze: no sense whatsoever. 307 00:22:23,780 --> 00:22:27,250 Suze: So if you're in that type of situation where the 308 00:22:27,260 --> 00:22:31,089 Suze: majority of your money is in a retirement account or 309 00:22:31,099 --> 00:22:33,869 Suze: even a certificate of deposit, that there would be a 310 00:22:33,880 --> 00:22:38,069 Suze: penalty fee or Series I bonds or whatever it may be. 311 00:22:39,109 --> 00:22:44,079 Suze: I will still say you are far better off paying 312 00:22:44,089 --> 00:22:48,119 Suze: off your mortgage by the time you retire. 313 00:22:49,020 --> 00:22:53,770 Suze: That's number one, number two, you may feel like you 314 00:22:53,780 --> 00:22:58,650 Suze: have money in the stock market that is invested and 315 00:22:58,660 --> 00:23:02,150 Suze: in case anything happened, you would use that money to 316 00:23:02,160 --> 00:23:05,530 Suze: pay off your mortgage. Remember what I just said a 317 00:23:05,540 --> 00:23:09,639 Suze: little bit ago about the possibilities of what can happen 318 00:23:09,650 --> 00:23:14,369 Suze: in the stock market and don't think it can't happen. 319 00:23:14,510 --> 00:23:17,170 Suze: It has and it can again 320 00:23:18,199 --> 00:23:23,869 Suze: for most of you, however, where you think, oh, I'm 321 00:23:23,880 --> 00:23:27,149 Suze: just going to work till the day. That I die 322 00:23:27,160 --> 00:23:30,410 Suze: and I'm just gonna pay off my mortgage, little by 323 00:23:30,420 --> 00:23:33,989 Suze: little and invest the rest and nothing will ever happen. 324 00:23:34,000 --> 00:23:35,329 Suze: And it's ok. 325 00:23:36,319 --> 00:23:39,170 Suze: You better think twice about that. Everybody 326 00:23:40,380 --> 00:23:45,660 Suze: anything can happen at any time. Not just you lose 327 00:23:45,670 --> 00:23:46,469 Suze: your job, 328 00:23:47,369 --> 00:23:52,179 Suze: but you're in a car accident, you get sick, you 329 00:23:52,189 --> 00:23:54,099 Suze: can't work anymore. 330 00:23:54,780 --> 00:24:01,109 Suze: Whatever happens that affects your ability to pay that mortgage. 331 00:24:02,170 --> 00:24:07,469 Suze: You would be far better off having taken the efforts 332 00:24:07,479 --> 00:24:11,419 Suze: in that case to pay down your mortgage by the 333 00:24:11,430 --> 00:24:16,280 Suze: time you retire. So for the majority of you that 334 00:24:16,290 --> 00:24:17,729 Suze: are listening to me 335 00:24:18,430 --> 00:24:22,400 Suze: that don't have the amount of money you owe on 336 00:24:22,410 --> 00:24:26,680 Suze: your mortgage somewhere safe and sound. 337 00:24:27,709 --> 00:24:32,310 Suze: Your goal needs to be to pay down your mortgage 338 00:24:32,319 --> 00:24:36,900 Suze: by the time you retire, if you know, you want 339 00:24:36,910 --> 00:24:42,000 Suze: to stay in that house for the rest of your life. 340 00:24:43,119 --> 00:24:46,329 Suze: So I wanted this to be a Suze School 341 00:24:47,150 --> 00:24:52,079 Suze: because out of all the lessons that we can learn, 342 00:24:53,160 --> 00:25:01,510 Suze: especially on this financial independence pre holiday since it's not 343 00:25:01,520 --> 00:25:02,930 Suze: for another two days, 344 00:25:04,500 --> 00:25:07,099 Suze: one of the greatest lessons 345 00:25:07,729 --> 00:25:13,500 Suze: is to obviously do whatever you can financially speaking to 346 00:25:13,510 --> 00:25:16,930 Suze: make the most out of your money. I mean, in 347 00:25:16,939 --> 00:25:20,219 Suze: the podcast that I gave on Father's Day and again, 348 00:25:20,229 --> 00:25:24,260 Suze: thank you everybody for all your very, very kind responses 349 00:25:24,420 --> 00:25:26,780 Suze: to that podcast 350 00:25:27,560 --> 00:25:31,930 Suze: where you have to make the most out of every penny. 351 00:25:33,880 --> 00:25:38,489 Suze: You also have to make your pennies, make the most 352 00:25:38,910 --> 00:25:43,369 Suze: out of how you can live a secure life 353 00:25:44,530 --> 00:25:48,179 Suze: because there's one thing about having a lot of money, 354 00:25:48,979 --> 00:25:53,790 Suze: there's another thing about also having a lot of security, 355 00:25:55,000 --> 00:26:00,599 Suze: no matter what happens when it happens, how it happens 356 00:26:00,609 --> 00:26:04,729 Suze: in your life. And if you can do that, 357 00:26:05,800 --> 00:26:12,719 Suze: then you truly have financial independence. So, Alex, I thank 358 00:26:12,729 --> 00:26:17,750 Suze: you for writing in that email. Maybe I made more 359 00:26:17,760 --> 00:26:21,319 Suze: sense to you or not, but at least I want 360 00:26:21,329 --> 00:26:25,869 Suze: you to know that I respected your efforts tremendously. And 361 00:26:25,880 --> 00:26:27,089 Suze: I applaud you 362 00:26:27,719 --> 00:26:32,209 Suze: for having done such a great, great job at the 363 00:26:32,219 --> 00:26:38,329 Suze: age of 50. All right, everybody. What are you doing here? 364 00:26:38,339 --> 00:26:40,359 KT: Suze, do you know what today is? 365 00:26:40,550 --> 00:26:41,880 Suze: Oh, you bet I do. 366 00:26:42,560 --> 00:26:44,339 KT: It's your niece's birthday. 367 00:26:44,380 --> 00:26:47,129 Suze: I know Alexis Tandy, 368 00:26:47,640 --> 00:26:55,968 Suze: Alexis Tandy from both KT, myself, Columbia, the whole family. 369 00:26:55,979 --> 00:26:58,948 Suze: We want you to know that we love you so very, 370 00:26:58,959 --> 00:27:05,930 Suze: very much and we wish you the happiest happiest of birthdays. 371 00:27:05,959 --> 00:27:07,609 Suze: So Alexis 372 00:27:08,459 --> 00:27:16,709 Suze: join us in saying, Today. Wherever we go, we will create 373 00:27:16,719 --> 00:27:23,739 Suze: a more peaceful, joyful and loving world and Alexis. If 374 00:27:23,750 --> 00:27:29,319 Suze: you do that, we promise you you and everybody will 375 00:27:29,329 --> 00:27:31,719 Suze: be unstoppable. 376 00:27:32,380 --> 00:27:33,209 KT: Happy birthday. 377 00:27:33,400 --> 00:27:35,109 Suze: Yeah, baby doll, love you. 378 00:27:40,280 --> 00:27:41,339 Music: Music (out).