1 00:00:29,440 --> 00:00:36,360 Suze: September 24th, 2023 Suze O here and welcome everybody to the 2 00:00:36,369 --> 00:00:41,790 Suze: Women and Money podcast as well as everybody smart enough 3 00:00:41,799 --> 00:00:42,930 Suze: to listen. 4 00:00:43,889 --> 00:00:48,040 Suze: All right. So I'm looking around, I'm looking at what's 5 00:00:48,049 --> 00:00:53,340 Suze: going on in the economy. I'm looking at right now 6 00:00:53,348 --> 00:00:58,500 Suze: as I'm recording this podcast that we have two very 7 00:00:58,509 --> 00:01:05,260 Suze: large unions striking the auto workers, the entertainment industry and 8 00:01:05,269 --> 00:01:09,919 Suze: that is going to cost billions and billions of dollars 9 00:01:09,930 --> 00:01:11,360 Suze: in the long run. 10 00:01:12,069 --> 00:01:18,000 Suze: I'm looking at a government that is facing once again 11 00:01:18,010 --> 00:01:24,199 Suze: a shutdown because they can't come to terms on how 12 00:01:24,209 --> 00:01:30,519 Suze: to solve the budget crisis. I'm looking at students who 13 00:01:30,529 --> 00:01:34,760 Suze: did not pay their student loans while we were during 14 00:01:34,769 --> 00:01:35,860 Suze: the pandemic 15 00:01:36,059 --> 00:01:38,988 Suze: and they thought that was going to go on forever 16 00:01:39,000 --> 00:01:41,449 Suze: and that President Biden was going to be able to 17 00:01:41,459 --> 00:01:44,790 Suze: excuse those loans or at least a portion of them. 18 00:01:45,300 --> 00:01:50,639 Suze: I'm now looking at thousands and thousands of students freaking 19 00:01:50,650 --> 00:01:54,800 Suze: out because they don't have the money to pay their 20 00:01:54,809 --> 00:01:59,269 Suze: student loans that start when in just a few days 21 00:01:59,279 --> 00:02:01,930 Suze: on October 1st, 22 00:02:02,449 --> 00:02:07,620 Suze: I'm looking at news where Russia now has just announced 23 00:02:08,339 --> 00:02:12,309 Suze: that they are no longer going to export any natural 24 00:02:12,320 --> 00:02:18,059 Suze: gas as well as diesel, which will affect things. Now, 25 00:02:18,119 --> 00:02:21,839 Suze: it is true in the past that Russia cut their 26 00:02:21,850 --> 00:02:25,570 Suze: 2 million barrel a day exports down to 1 million 27 00:02:25,580 --> 00:02:30,008 Suze: barrels a day and we got through that, but now 28 00:02:30,020 --> 00:02:33,820 Suze: they're gonna cut from 1 million to zero with no 29 00:02:33,910 --> 00:02:35,690 Suze: end in sight. 30 00:02:35,910 --> 00:02:39,399 Suze: And they're doing that at the exact same time 31 00:02:40,179 --> 00:02:42,380 Suze: when winter is approaching 32 00:02:43,360 --> 00:02:48,149 Suze: and it will seriously affect Europe heating as well as 33 00:02:48,160 --> 00:02:49,570 Suze: everything else. 34 00:02:50,279 --> 00:02:54,160 Suze: I'm also looking at the price of oil which has 35 00:02:54,169 --> 00:02:58,009 Suze: gone up 30% over the past few months. There are 36 00:02:58,020 --> 00:03:02,460 Suze: places in California where just the past week or so, 37 00:03:02,470 --> 00:03:05,809 Suze: gas went up from 5.50 a gallon up to $7 38 00:03:05,820 --> 00:03:09,410 Suze: a gallon and probably will not come down for some time. 39 00:03:10,029 --> 00:03:13,729 Suze: And oil has a whole lot to do with more 40 00:03:13,740 --> 00:03:17,869 Suze: than just what the gasoline that you put in your cars. 41 00:03:17,880 --> 00:03:20,600 Suze: It has to do with the manufacturing of plastic and 42 00:03:20,610 --> 00:03:26,199 Suze: other things that then keys into what it keys into inflation. 43 00:03:26,750 --> 00:03:29,449 Suze: And if inflation does start to go up a little 44 00:03:29,460 --> 00:03:33,470 Suze: bit there, then that keys into the feds raising their 45 00:03:33,479 --> 00:03:34,600 Suze: interest rates 46 00:03:35,149 --> 00:03:41,320 Suze: even faster even though they just paused a few days ago. 47 00:03:41,899 --> 00:03:45,309 Suze: But the fed did say with the two meetings that 48 00:03:45,320 --> 00:03:50,330 Suze: are coming up, we'll probably raise one more time and 49 00:03:50,339 --> 00:03:55,100 Suze: maybe next year we'll see what happens, but it could 50 00:03:55,110 --> 00:03:58,160 Suze: stay higher for longer. 51 00:03:58,800 --> 00:04:02,729 Suze: So what does all of this mean to you? 52 00:04:03,679 --> 00:04:05,369 Suze: It means that 53 00:04:06,220 --> 00:04:09,110 Suze: you have to make moves with your money 54 00:04:09,830 --> 00:04:13,029 Suze: that are really, really careful moves 55 00:04:13,690 --> 00:04:18,738 Suze: just because everything has seemed so great these past few months. 56 00:04:19,329 --> 00:04:23,149 Suze: That doesn't mean that you should just now be spending 57 00:04:23,160 --> 00:04:26,279 Suze: money on this and doing this and doing that. Because 58 00:04:26,290 --> 00:04:30,058 Suze: what we're seeing with credit cards, is credit card debt 59 00:04:30,070 --> 00:04:33,929 Suze: is going up and up and up, many of them 60 00:04:33,940 --> 00:04:37,799 Suze: are maxing out. They're maxing out again at the same 61 00:04:37,809 --> 00:04:40,500 Suze: time that student loan debt is due. 62 00:04:41,410 --> 00:04:46,019 Suze: And we're also dealing at a time when real estate 63 00:04:46,029 --> 00:04:49,100 Suze: because interest rates are so high 64 00:04:49,790 --> 00:04:53,339 Suze: and the people that own their homes at a lower 65 00:04:53,350 --> 00:04:58,909 Suze: interest rate, a mortgage of 2, 2.5 or 3% they're 66 00:04:58,920 --> 00:05:03,829 Suze: just not willing to sell. So the inventory of real 67 00:05:03,839 --> 00:05:08,559 Suze: estate is going down and down and you're hearing on 68 00:05:08,570 --> 00:05:12,000 Suze: the news, well, it's not as many people applying for 69 00:05:12,010 --> 00:05:16,029 Suze: mortgages and things like that and you're translating that to oh, 70 00:05:16,238 --> 00:05:18,559 Suze: prices are going to come down, 71 00:05:18,880 --> 00:05:24,849 Suze: prices are not going to come down until mortgage rates 72 00:05:24,899 --> 00:05:29,730 Suze: can come down so that those people who own homes 73 00:05:29,738 --> 00:05:33,988 Suze: feel ok about selling them because then when they buy 74 00:05:34,000 --> 00:05:37,909 Suze: another one, their interest rate on that mortgage is not 75 00:05:37,920 --> 00:05:39,529 Suze: going to be so high. 76 00:05:40,380 --> 00:05:44,928 Suze: So if you're going to buy a home, I would 77 00:05:44,940 --> 00:05:48,109 Suze: not be out there thinking, oh, I'm just gonna wait 78 00:05:48,119 --> 00:05:53,250 Suze: until mortgage rates come down, prices come down. I don't 79 00:05:53,260 --> 00:05:56,539 Suze: think you're going to see that happen as soon as 80 00:05:56,549 --> 00:06:01,049 Suze: you would. Like. I actually think that we may get 81 00:06:01,059 --> 00:06:05,750 Suze: stuck at a 5% mortgage rate for some time. 82 00:06:06,720 --> 00:06:10,700 Suze: I don't think, given the oil prices and everything that 83 00:06:10,709 --> 00:06:15,269 Suze: the feds are going to get their inflation rate down 84 00:06:15,279 --> 00:06:18,649 Suze: to about 2%. I think they're going to have to 85 00:06:18,660 --> 00:06:22,649 Suze: settle for about a three or 4% inflation rate. 86 00:06:23,579 --> 00:06:27,829 Suze: So these are all things that we need to get 87 00:06:27,839 --> 00:06:31,950 Suze: used to. Also just one quick thing for those of 88 00:06:31,959 --> 00:06:35,349 Suze: us that are collecting social security and we got a 89 00:06:35,359 --> 00:06:41,440 Suze: really big cost of living increase for 2023. I don't 90 00:06:41,450 --> 00:06:42,410 Suze: think you're gonna see 91 00:06:42,510 --> 00:06:46,339 Suze: an increase anywhere as near as big as you saw 92 00:06:46,660 --> 00:06:53,250 Suze: in 2023 and 2024. So don't plan on that. Just 93 00:06:53,260 --> 00:06:58,500 Suze: plan on maybe 40 or $50 per month increase in 94 00:06:58,589 --> 00:07:01,320 Suze: your social security check. 95 00:07:02,540 --> 00:07:07,209 Suze: So where am I going with all this? I think 96 00:07:07,220 --> 00:07:11,190 Suze: we really have to look the big picture. You know, 97 00:07:11,200 --> 00:07:13,630 Suze: they always say when I'm doing a business deal. Well, 98 00:07:13,640 --> 00:07:15,859 Suze: let me talk to you about it on the, on 99 00:07:15,869 --> 00:07:18,269 Suze: a high level and I'm always like, what the heck 100 00:07:18,279 --> 00:07:23,109 Suze: is a high level. So I think I'll play with 101 00:07:23,119 --> 00:07:27,470 Suze: you with that where if we look down from above, 102 00:07:27,480 --> 00:07:31,489 Suze: so we're taking the high viewpoint of everything that's going on. 103 00:07:32,179 --> 00:07:36,089 Suze: I think it's really important that we think about how 104 00:07:36,100 --> 00:07:40,769 Suze: do we invest money today to make the most out 105 00:07:40,779 --> 00:07:43,630 Suze: of the situation that we have? 106 00:07:44,480 --> 00:07:48,750 Suze: And I still believe that we can make not for 107 00:07:48,760 --> 00:07:52,950 Suze: a long time, not for years and years and years, 108 00:07:52,959 --> 00:07:57,010 Suze: but for a considerable amount of time. Anyway, I still 109 00:07:57,019 --> 00:08:01,570 Suze: believe that the bond market eventually will be where you 110 00:08:01,579 --> 00:08:02,920 Suze: would like to have 111 00:08:03,220 --> 00:08:06,730 Suze: a nice chunk of money. Now, you have to decide 112 00:08:06,739 --> 00:08:10,750 Suze: on that chunk of money. But can you remember that 113 00:08:10,760 --> 00:08:12,589 Suze: for a year or two? I was saying, no, no, 114 00:08:12,600 --> 00:08:15,279 Suze: don't buy bonds. Get out of bonds. You don't want 115 00:08:15,290 --> 00:08:21,450 Suze: long term bonds. And recently I've started to say, yeah, 116 00:08:21,459 --> 00:08:27,649 Suze: little by little, start investing again in longer term bonds. 117 00:08:28,070 --> 00:08:31,309 Suze: So I want you to have when it comes to 118 00:08:31,320 --> 00:08:37,968 Suze: your fixed income investments, a dumbbell strategy, I don't even 119 00:08:37,979 --> 00:08:40,460 Suze: know what that is, but I'm just gonna put it 120 00:08:40,469 --> 00:08:44,260 Suze: out there and a dumbbell is like when you pick 121 00:08:44,270 --> 00:08:47,299 Suze: up these dumbbells, like you have weights on one side, 122 00:08:47,309 --> 00:08:50,320 Suze: weights on another. I want you to have some of 123 00:08:50,330 --> 00:08:52,319 Suze: your money short term 124 00:08:52,890 --> 00:08:58,450 Suze: in three and six months, treasury bills or certificates of deposits, 125 00:08:58,460 --> 00:09:00,309 Suze: whatever's paying you the most 126 00:09:01,359 --> 00:09:06,000 Suze: and have a little bit there. But I also want 127 00:09:06,010 --> 00:09:09,330 Suze: you to start having little bits that you put in 128 00:09:09,340 --> 00:09:14,169 Suze: every month for your fixed income into 10 year notes 129 00:09:14,179 --> 00:09:18,950 Suze: or 20 year bonds or 30 year bonds because there 130 00:09:18,960 --> 00:09:23,450 Suze: will come a time, especially if we enter a recession. 131 00:09:23,659 --> 00:09:26,039 Suze: I don't know if we're going to or not. There 132 00:09:26,049 --> 00:09:30,130 Suze: are some incredibly smart people that think we will still, 133 00:09:30,369 --> 00:09:33,679 Suze: there are many that think we won't, but let's just 134 00:09:33,690 --> 00:09:37,400 Suze: say we did, then interest rates are going to have 135 00:09:37,409 --> 00:09:41,419 Suze: to start to come down faster than if we don't 136 00:09:41,429 --> 00:09:46,520 Suze: enter a recession. And when that happens, the price of 137 00:09:46,530 --> 00:09:51,239 Suze: those bonds will absolutely go up. And when we've seen 138 00:09:51,250 --> 00:09:55,099 Suze: enough of an increase on those bonds, we will exit 139 00:09:55,109 --> 00:10:00,059 Suze: those bonds and very possibly at that point in time, 140 00:10:00,469 --> 00:10:04,539 Suze: take that money. And if that starts to happen, by 141 00:10:04,549 --> 00:10:07,400 Suze: the way, then the stock market could very easily go 142 00:10:07,409 --> 00:10:12,358 Suze: down and then start to put it into stocks that 143 00:10:12,369 --> 00:10:14,718 Suze: pay a high dividend yield. 144 00:10:15,460 --> 00:10:19,590 Suze: So that's just things that I want you to think about, 145 00:10:20,270 --> 00:10:24,020 Suze: but we need to stay up to date on all 146 00:10:24,030 --> 00:10:27,799 Suze: of this and we need to be careful again. 147 00:10:28,059 --> 00:10:32,140 Suze: This is not the time if you have just gotten 148 00:10:32,150 --> 00:10:36,090 Suze: an inheritance. And what I find fascinating is for some 149 00:10:36,099 --> 00:10:40,069 Suze: reason right now, I'm getting more and more emails with 150 00:10:40,080 --> 00:10:46,909 Suze: people saying I just inherited $750,000 1.2 million dollars, 200,000. 151 00:10:46,919 --> 00:10:50,228 Suze: What should I do with it, Suze Orman? 152 00:10:51,030 --> 00:10:55,119 Suze: So I again, will get to that in a second. 153 00:10:55,130 --> 00:10:58,159 Suze: What I think we should do with it, but I 154 00:10:58,169 --> 00:11:00,900 Suze: can tell you one thing, what you should not do 155 00:11:00,909 --> 00:11:04,400 Suze: with it is you should not put all of it 156 00:11:04,669 --> 00:11:08,559 Suze: in one lump sum in the stock market at this 157 00:11:08,570 --> 00:11:13,619 Suze: point in time. Do you hear me if you are 158 00:11:13,630 --> 00:11:16,640 Suze: going to be investing in the stock market right now, 159 00:11:16,650 --> 00:11:20,659 Suze: you have got to do dollar cost averaging 160 00:11:21,489 --> 00:11:25,439 Suze: because you never know when these markets could really take 161 00:11:25,450 --> 00:11:29,900 Suze: a turnaround very quickly and go down. But whether they 162 00:11:29,909 --> 00:11:33,080 Suze: just go straight down or they go down and up 163 00:11:33,090 --> 00:11:39,460 Suze: or down dollar cost averaging is the way to go. 164 00:11:40,239 --> 00:11:44,380 Suze: Here's really what I want the Suze School to be 165 00:11:44,390 --> 00:11:45,929 Suze: about today. 166 00:11:46,830 --> 00:11:48,900 Suze: What do you do 167 00:11:49,590 --> 00:11:55,919 Suze: when you have received an inheritance? And maybe it is 168 00:11:55,929 --> 00:11:57,460 Suze: the first time 169 00:11:58,150 --> 00:12:01,799 Suze: that you have gotten a large sum of money and 170 00:12:01,809 --> 00:12:05,809 Suze: now you don't have a clue what to do with it. 171 00:12:06,109 --> 00:12:09,640 Suze: All right, take out your little Suze notebooks. 172 00:12:10,669 --> 00:12:14,840 Suze: You have to look at your financial situation and you 173 00:12:14,849 --> 00:12:20,179 Suze: need to write down everything that you have. Let's start 174 00:12:20,190 --> 00:12:21,559 Suze: with debt. 175 00:12:22,330 --> 00:12:25,729 Suze: I want you to write down how much credit card 176 00:12:25,739 --> 00:12:29,199 Suze: debt you have. I want you to write down how 177 00:12:29,210 --> 00:12:37,520 Suze: much student loan debt you have car loan debt, 401k, 178 00:12:37,530 --> 00:12:40,640 Suze: or any retirement loan debt, 179 00:12:41,390 --> 00:12:43,919 Suze: and then mortgage debt 180 00:12:44,539 --> 00:12:49,289 Suze: and also any personal debt. If you've borrowed money from 181 00:12:49,299 --> 00:12:50,789 Suze: any single person 182 00:12:51,590 --> 00:12:54,599 Suze: and you have not paid them back yet. 183 00:12:55,299 --> 00:12:58,580 Suze: And I want you then next to each one of 184 00:12:58,590 --> 00:13:03,590 Suze: those categories to put down the average interest rate that 185 00:13:03,599 --> 00:13:07,090 Suze: you are paying on that debt. 186 00:13:08,000 --> 00:13:11,280 Suze: That's the first thing that I want you to do. 187 00:13:12,239 --> 00:13:18,349 Suze: Second topic is emergency savings accounts. 188 00:13:19,369 --> 00:13:26,229 Suze: How much do you have in, an emergency savings account? Now, 189 00:13:26,239 --> 00:13:31,750 Suze: I want to make a distinction here between an emergency 190 00:13:31,760 --> 00:13:33,210 Suze: savings account 191 00:13:34,359 --> 00:13:41,700 Suze: and a must pay savings account. An emergency savings account 192 00:13:42,000 --> 00:13:47,789 Suze: is for true emergencies such as your car breaks down 193 00:13:47,799 --> 00:13:50,619 Suze: and it's gonna cost you $400 to fix it up. 194 00:13:50,630 --> 00:13:54,469 Suze: Maybe you blow a tire, your air conditioner started to 195 00:13:54,479 --> 00:13:59,229 Suze: go wonky your refrigerator. I want you to write down 196 00:13:59,710 --> 00:14:04,358 Suze: all the possible little emergencies that would have to be 197 00:14:04,369 --> 00:14:10,559 Suze: fixed right away. That's why it's an emergency. You don't 198 00:14:10,570 --> 00:14:15,460 Suze: have a choice. You have got to fix it right away. Now, 199 00:14:15,469 --> 00:14:20,020 Suze: why am I concentrating on that? Because do you know 200 00:14:20,580 --> 00:14:25,289 Suze: that almost 74% of the people in the United States 201 00:14:25,859 --> 00:14:32,510 Suze: don't have $400 to fix an emergency? 202 00:14:33,210 --> 00:14:38,619 Suze: That if in an emergency happened for $400 the only 203 00:14:38,630 --> 00:14:41,219 Suze: way they would be able to pay for it would 204 00:14:41,229 --> 00:14:45,219 Suze: be a credit card. A 401k loan 205 00:14:45,859 --> 00:14:50,150 Suze: maybe asking friends and family for money or payday loan. 206 00:14:51,820 --> 00:14:58,190 Suze: Three quarters of the people in the United States got that. Everybody. 207 00:14:58,869 --> 00:15:02,469 Suze: I don't want you to be one of those people. 208 00:15:02,789 --> 00:15:06,500 Suze: It is very important that you know, how much liquid 209 00:15:06,510 --> 00:15:08,640 Suze: cash do you have 210 00:15:10,179 --> 00:15:14,340 Suze: to pay for in an emergency? And I would like 211 00:15:14,349 --> 00:15:20,320 Suze: to see you have at least 1 to $2000 in 212 00:15:20,440 --> 00:15:21,630 Suze: that account. 213 00:15:22,510 --> 00:15:28,719 Suze: Next, I want you to have another savings account called 214 00:15:28,729 --> 00:15:32,739 Suze: Your Must Pay Savings Account. 215 00:15:34,250 --> 00:15:39,820 Suze: What must you pay every single month? You must pay 216 00:15:39,830 --> 00:15:45,080 Suze: your mortgage, your rent, your car payment, your insurance premiums, 217 00:15:45,090 --> 00:15:47,359 Suze: things like that. 218 00:15:48,099 --> 00:15:51,710 Suze: So yes, I know you have a paycheck coming in. 219 00:15:51,950 --> 00:15:57,109 Suze: Everything is ok. Maybe you've been living paycheck to paycheck, 220 00:15:57,119 --> 00:16:01,030 Suze: which is why it's incredibly important that you first have 221 00:16:01,039 --> 00:16:05,510 Suze: an emergency savings account. In case even while you're working, 222 00:16:05,520 --> 00:16:08,809 Suze: your car breaks down or something is needed where you 223 00:16:08,820 --> 00:16:12,090 Suze: need the money, you didn't expect to need it. It's 224 00:16:12,099 --> 00:16:13,770 Suze: an emergency, but you need it. 225 00:16:14,789 --> 00:16:19,710 Suze: However, what happens if you lose your job 226 00:16:20,729 --> 00:16:24,280 Suze: all of a sudden you don't have income coming in. 227 00:16:24,400 --> 00:16:28,179 Suze: Maybe you were laid off, maybe you got sick, maybe 228 00:16:28,190 --> 00:16:29,840 Suze: you were in a car accident. 229 00:16:30,549 --> 00:16:37,710 Suze: You need eight months of expenses of must pay expenses 230 00:16:37,719 --> 00:16:41,520 Suze: in a must pay savings account. 231 00:16:43,000 --> 00:16:52,210 Suze: So those are three categories there right. Next is retirement accounts. 232 00:16:53,210 --> 00:16:57,039 Suze: I want you to write down all the retirement accounts 233 00:16:57,049 --> 00:17:01,929 Suze: you have and how much money you have in each 234 00:17:02,070 --> 00:17:04,739 Suze: and the answer to this question. 235 00:17:05,500 --> 00:17:11,869 Suze: Are you maxing out your retirement accounts or are you not? 236 00:17:13,239 --> 00:17:17,089 Suze: All right. So you'll put a yes or no there. 237 00:17:18,390 --> 00:17:23,139 Suze: All right. So let's just stay with these categories, these 238 00:17:23,150 --> 00:17:25,630 Suze: four categories right now. 239 00:17:26,579 --> 00:17:30,410 Suze: And you have gotten an inheritance. 240 00:17:31,060 --> 00:17:31,829 Suze: Ok. 241 00:17:32,770 --> 00:17:36,060 Suze: If I got a substantial inheritance, 242 00:17:36,869 --> 00:17:40,030 Suze: the very first things that I would do with it 243 00:17:40,089 --> 00:17:43,339 Suze: is I would do what I would get rid of 244 00:17:43,349 --> 00:17:46,859 Suze: my credit card debt. If there was enough money, I 245 00:17:46,869 --> 00:17:49,530 Suze: would get rid of my car loan debt. I would 246 00:17:49,540 --> 00:17:52,579 Suze: absolutely get rid of my personal debt that I owed 247 00:17:52,589 --> 00:17:55,698 Suze: anybody money to. I would get rid of my student 248 00:17:55,709 --> 00:17:59,770 Suze: loan debt. I would get rid of my 401k debt. 249 00:18:00,099 --> 00:18:03,469 Suze: And depending on the interest rate that you are paying 250 00:18:03,479 --> 00:18:04,680 Suze: on your mortgage. 251 00:18:05,030 --> 00:18:07,290 Suze: And if you are going to be staying in your 252 00:18:07,300 --> 00:18:11,510 Suze: home forever and you're older, you're in your sixties. When 253 00:18:11,520 --> 00:18:13,739 Suze: this happens, I would get rid of my mortgage debt 254 00:18:14,729 --> 00:18:18,540 Suze: by the way that you categorize, this is the highest 255 00:18:18,550 --> 00:18:21,660 Suze: interest rate to the lowest 256 00:18:22,329 --> 00:18:25,469 Suze: and that is how you would do it. Except for 257 00:18:25,479 --> 00:18:26,260 Suze: one thing 258 00:18:27,170 --> 00:18:33,630 Suze: if I inherited money and somebody lent me money that 259 00:18:33,640 --> 00:18:36,959 Suze: I haven't been able to pay them back, even if 260 00:18:36,969 --> 00:18:42,458 Suze: it's at a 0% interest rate, I would pay them 261 00:18:42,469 --> 00:18:48,000 Suze: back before I did anything else with any of my inheritance. 262 00:18:48,260 --> 00:18:53,079 Suze: Once that was paid back, I would then categorize my 263 00:18:53,089 --> 00:18:56,800 Suze: debt from the highest to the lowest interest rate 264 00:18:57,329 --> 00:19:00,900 Suze: depending on how much money you inherited. And I would 265 00:19:00,910 --> 00:19:05,130 Suze: get rid of as much of that debt as I could. 266 00:19:05,310 --> 00:19:08,949 Suze: If the inheritance was totally taken up by getting rid 267 00:19:08,959 --> 00:19:13,140 Suze: of my credit card debt, student loan, debt, car loan debt. Great. 268 00:19:13,150 --> 00:19:14,859 Suze: Then if that's it, it's over, 269 00:19:15,510 --> 00:19:17,599 Suze: you don't have that debt anymore. 270 00:19:18,239 --> 00:19:22,290 Suze: That if it's a large inheritance, I would seriously look 271 00:19:22,300 --> 00:19:26,270 Suze: at getting rid of all debt. The only debt I 272 00:19:26,280 --> 00:19:29,609 Suze: would think twice about would be the mortgage debt, depending 273 00:19:29,619 --> 00:19:32,630 Suze: on the interest rate, the tax write off and if 274 00:19:32,640 --> 00:19:34,770 Suze: you're going to stay there forever. 275 00:19:35,449 --> 00:19:38,839 Suze: The next thing I would do is fund my emergency 276 00:19:38,849 --> 00:19:44,000 Suze: savings account to 1 to $2000 minimum. The next I 277 00:19:44,010 --> 00:19:50,060 Suze: would do what I would multiply if it's a large inheritance, 278 00:19:50,069 --> 00:19:54,119 Suze: I would multiply my monthly expenses of what it takes 279 00:19:54,130 --> 00:19:59,280 Suze: me to live every single month. And let's say it's 280 00:19:59,290 --> 00:20:01,500 Suze: $10,000 a month. 281 00:20:02,160 --> 00:20:05,649 Suze: I would multiply that by eight and I would put 282 00:20:05,660 --> 00:20:12,130 Suze: $80,000 in a must pay savings account. That's a high 283 00:20:12,140 --> 00:20:15,250 Suze: yield account or a money market account where you could 284 00:20:15,260 --> 00:20:17,709 Suze: get at it if you needed it 285 00:20:18,439 --> 00:20:22,290 Suze: after I did that, if there was still money left, 286 00:20:22,310 --> 00:20:26,160 Suze: I would look at my retirement accounts and if I 287 00:20:26,170 --> 00:20:29,810 Suze: still this year could fully fund them and put money 288 00:20:29,819 --> 00:20:35,939 Suze: towards them, I would absolutely do. So. Now, once you 289 00:20:35,949 --> 00:20:42,250 Suze: have done that, if there is still money left over, 290 00:20:43,170 --> 00:20:46,089 Suze: then what I would be doing if I were you, 291 00:20:46,219 --> 00:20:49,489 Suze: I would be asking myself the question. Do I want 292 00:20:49,500 --> 00:20:54,890 Suze: to help my children o to college. And if so 293 00:20:54,900 --> 00:20:57,790 Suze: I might fund, if there was enough money in the 294 00:20:57,800 --> 00:21:02,819 Suze: inheritance to do so, a 529 plan for them. 295 00:21:03,790 --> 00:21:06,760 Suze: If there was still money left over, 296 00:21:07,520 --> 00:21:12,770 Suze: I would then absolutely. If I was in my fifties, 297 00:21:13,239 --> 00:21:17,130 Suze: I would be looking into long term care insurance, making 298 00:21:17,140 --> 00:21:19,810 Suze: sure that I put enough money aside to fund that 299 00:21:19,819 --> 00:21:21,530 Suze: every single year 300 00:21:22,859 --> 00:21:26,550 Suze: I would then start to look at all. Right. I'm 301 00:21:26,560 --> 00:21:30,489 Suze: fully funding my retirement. I don't have debt. I have 302 00:21:30,500 --> 00:21:34,650 Suze: emergency savings. I have must pay savings. My kids are 303 00:21:34,660 --> 00:21:37,129 Suze: taken care of. I'm taken care of for when I 304 00:21:37,140 --> 00:21:39,188 Suze: get older with long term care. 305 00:21:39,969 --> 00:21:43,410 Suze: Right now, if you want to start investing in an 306 00:21:43,449 --> 00:21:49,199 Suze: investment account outside of retirement where you were buying bonds, 307 00:21:49,209 --> 00:21:53,630 Suze: short term and long term dollar cost averaging into ETFs 308 00:21:53,670 --> 00:21:59,810 Suze: or individual stocks. There you go. But that is how 309 00:21:59,819 --> 00:22:01,280 Suze: I would do it. 310 00:22:02,380 --> 00:22:07,290 Suze: One last thing is we normally assume that our inheritance 311 00:22:07,300 --> 00:22:13,189 Suze: came from our parents or an older relative who passed 312 00:22:13,199 --> 00:22:13,819 Suze: away 313 00:22:14,449 --> 00:22:20,379 Suze: if our parents are still living and the inheritance came 314 00:22:20,390 --> 00:22:25,140 Suze: from a friend, somebody else and our parents are not 315 00:22:25,150 --> 00:22:29,949 Suze: doing well financially. You have got to put them in 316 00:22:29,979 --> 00:22:31,879 Suze: this equation. 317 00:22:32,290 --> 00:22:36,280 Suze: In fact, right after the debt, the emergency savings and 318 00:22:36,290 --> 00:22:40,198 Suze: the must pay savings in your own retirement accounts. Your 319 00:22:40,209 --> 00:22:45,310 Suze: parents have to come before your kids. So that is 320 00:22:45,319 --> 00:22:47,680 Suze: the only caveat there. 321 00:22:48,589 --> 00:22:54,939 Suze: So that is what I would do with large inheritances 322 00:22:55,060 --> 00:23:00,560 Suze: and you can scale that down depending on your needs, 323 00:23:00,569 --> 00:23:05,959 Suze: your health considerations and things like that. Ok. 324 00:23:06,849 --> 00:23:09,500 Suze: I do want to say something. However, 325 00:23:10,709 --> 00:23:15,329 Suze: sometimes we kind of create our own inheritance. What do 326 00:23:15,339 --> 00:23:16,438 Suze: I mean by that? 327 00:23:17,930 --> 00:23:21,619 Suze: We're in a relationship, we're married, it's been a great 328 00:23:21,630 --> 00:23:22,579 Suze: relationship 329 00:23:23,219 --> 00:23:28,139 Suze: and our spouse dies and we get a life insurance policy. 330 00:23:28,400 --> 00:23:32,020 Suze: Maybe that's in effect at that point in time from 331 00:23:32,030 --> 00:23:35,890 Suze: our spouse passing or we get all the money that 332 00:23:35,900 --> 00:23:40,270 Suze: was in his or her or their retirement accounts or 333 00:23:40,280 --> 00:23:44,188 Suze: whatever it may be. So now we find ourselves in 334 00:23:44,199 --> 00:23:49,969 Suze: a situation where we're still alive, but we have more 335 00:23:49,979 --> 00:23:51,650 Suze: money than we ever thought 336 00:23:52,520 --> 00:23:56,629 Suze: we own our homes outright. We have a good deal 337 00:23:56,640 --> 00:23:59,770 Suze: of money and now we're thinking, oh, 338 00:24:00,770 --> 00:24:04,969 Suze: I'm getting older, I'm in my seventies maybe now is 339 00:24:04,979 --> 00:24:08,050 Suze: the time that I should give my Children who are 340 00:24:08,060 --> 00:24:13,709 Suze: struggling who are possibly in their late forties or even 341 00:24:13,719 --> 00:24:17,719 Suze: early fifties. Just depends when you had Children, I should 342 00:24:17,729 --> 00:24:22,060 Suze: give them some of this money now so they could 343 00:24:22,069 --> 00:24:22,780 Suze: use it. 344 00:24:23,430 --> 00:24:28,399 Suze: And I'm citing this example because this has happened to 345 00:24:28,410 --> 00:24:32,329 Suze: somebody that I've had a relationship with that I met 346 00:24:32,339 --> 00:24:35,709 Suze: through the podcast and through a talk that I gave 347 00:24:35,750 --> 00:24:40,489 Suze: and this person happens to be in this exact situation. 348 00:24:41,290 --> 00:24:45,699 Suze: She's going to sell her home. She has $2 million. 349 00:24:45,709 --> 00:24:48,619 Suze: She's doing great. We're gonna keep the money that she 350 00:24:48,630 --> 00:24:51,488 Suze: sold her home with to possibly buy another home for 351 00:24:51,500 --> 00:24:58,219 Suze: herself outright. But now she wants to give $150,000 to 352 00:24:58,229 --> 00:25:02,459 Suze: each of her two kids. And she wants me to 353 00:25:02,469 --> 00:25:03,819 Suze: say yes 354 00:25:05,079 --> 00:25:08,119 Suze: and I cannot say yes. 355 00:25:09,050 --> 00:25:12,000 Suze: And I just want you to hear me out. If 356 00:25:12,010 --> 00:25:15,099 Suze: you happen to be in a situation like that 357 00:25:15,969 --> 00:25:18,140 Suze: as we get older, 358 00:25:18,920 --> 00:25:22,489 Suze: it becomes more and more and more expensive 359 00:25:23,280 --> 00:25:27,479 Suze: to take care of ourselves. The one question that I 360 00:25:27,489 --> 00:25:29,520 Suze: asked this person, I said, well, do you have a 361 00:25:29,530 --> 00:25:31,310 Suze: long term care insurance policy? 362 00:25:31,969 --> 00:25:35,469 Suze: And she said, no, I don't, they're just gonna eat 363 00:25:35,479 --> 00:25:38,280 Suze: up all my money. It's too expensive now. And really, 364 00:25:38,290 --> 00:25:41,750 Suze: she's only like 71 or 72 my age. So it's 365 00:25:41,760 --> 00:25:43,060 Suze: not too expensive. 366 00:25:43,849 --> 00:25:47,119 Suze: So I've asked her to look into that, but she 367 00:25:47,130 --> 00:25:50,660 Suze: still is like Susie, I need you to say yes. 368 00:25:51,430 --> 00:25:55,239 Suze: The reason that I am never going to say yes 369 00:25:55,760 --> 00:25:59,510 Suze: is because as I was starting to say, listen, everybody, 370 00:26:00,229 --> 00:26:03,649 Suze: as we all get older, I'm getting older, many of 371 00:26:03,660 --> 00:26:04,959 Suze: us are getting older. 372 00:26:05,770 --> 00:26:08,300 Suze: Things tend to go wrong 373 00:26:08,979 --> 00:26:13,550 Suze: and it becomes more and more expensive to live. 374 00:26:14,550 --> 00:26:17,239 Suze: We never know is the stock market going to crash? 375 00:26:17,250 --> 00:26:20,300 Suze: Is the bond market going to crash? What is really 376 00:26:20,310 --> 00:26:21,468 Suze: going to happen? 377 00:26:22,319 --> 00:26:27,209 Suze: So it is essential that while you are alive, especially 378 00:26:27,219 --> 00:26:30,410 Suze: if there's just one of you left now, 379 00:26:31,280 --> 00:26:36,680 Suze: it's you and you are responsible for your own being. 380 00:26:37,489 --> 00:26:41,219 Suze: Then you have to make sure that you keep, unless 381 00:26:41,229 --> 00:26:44,899 Suze: we're talking about that you have 20, 30 $40 million but 382 00:26:44,910 --> 00:26:51,150 Suze: $2 million is not enough to be giving away more 383 00:26:51,160 --> 00:26:54,180 Suze: than 10% of it. It just isn't. 384 00:26:55,189 --> 00:26:58,479 Suze: And I'm not even sure it would do her kids 385 00:26:58,489 --> 00:27:01,679 Suze: any good at this point in time because one of 386 00:27:01,689 --> 00:27:05,459 Suze: them in particular may waste it. They're not very good 387 00:27:05,469 --> 00:27:08,640 Suze: with money. And there we go again. And now she's 388 00:27:08,650 --> 00:27:10,699 Suze: going to find herself in a situation that as her 389 00:27:10,709 --> 00:27:14,650 Suze: kids are getting older, her kids may need money more 390 00:27:14,660 --> 00:27:16,540 Suze: than her just wanting to give it to them. 391 00:27:17,150 --> 00:27:21,280 Suze: So I'm asking all of you who are in that 392 00:27:21,290 --> 00:27:27,599 Suze: range and you're thinking about it, please keep it for yourself. 393 00:27:27,989 --> 00:27:32,770 Suze: Your kids as they get older, they're in their seventies, 394 00:27:32,780 --> 00:27:36,459 Suze: they're possibly in their eighties. They're going to need it 395 00:27:36,469 --> 00:27:39,270 Suze: as much as you probably will need it when you 396 00:27:39,280 --> 00:27:41,800 Suze: get that age as well. 397 00:27:42,959 --> 00:27:47,770 Suze: So I'm asking all of you to just think about 398 00:27:47,979 --> 00:27:52,430 Suze: that when it comes to not what to do with 399 00:27:52,439 --> 00:27:55,889 Suze: an inheritance, but what to do with when you sell 400 00:27:55,900 --> 00:27:59,089 Suze: your home, you get a lump sum, you've hit it 401 00:27:59,099 --> 00:28:01,930 Suze: big in the stock market, you got a stock buy 402 00:28:01,939 --> 00:28:07,790 Suze: out whatever it may be. Please be careful about being 403 00:28:07,800 --> 00:28:10,670 Suze: overly generous to your Children. 404 00:28:11,500 --> 00:28:16,439 Suze: The greatest gift your Children can give to themselves is 405 00:28:16,449 --> 00:28:20,930 Suze: the gift of self independence, the gift of self knowledge 406 00:28:20,939 --> 00:28:23,589 Suze: of knowing that they can make it on their own. 407 00:28:24,550 --> 00:28:29,050 Suze: The gift of feeling independent and not dependent on their 408 00:28:29,060 --> 00:28:33,199 Suze: parents when they're 60 or 70 years of age or 409 00:28:33,209 --> 00:28:35,300 Suze: any age for that matter. 410 00:28:36,400 --> 00:28:43,160 Suze: So sometimes helping is hurting, sometimes hurting is helping. But 411 00:28:43,170 --> 00:28:46,630 Suze: my job is to make sure that every one of you, 412 00:28:46,640 --> 00:28:49,369 Suze: especially as you get older, 413 00:28:50,030 --> 00:28:54,349 Suze: that you are safe, you are secure and that you 414 00:28:54,359 --> 00:28:59,089 Suze: are strong and that is the sole purpose of the 415 00:28:59,099 --> 00:29:04,109 Suze: Women and Money podcast. So until Thursday, when M Travis 416 00:29:04,119 --> 00:29:07,829 Suze: will join us again with an Ask KT and Suze anything, 417 00:29:07,989 --> 00:29:10,439 Suze: there's only one thing that I want you to say 418 00:29:10,449 --> 00:29:14,359 Suze: every single day and it is this 419 00:29:14,839 --> 00:29:20,099 Suze: today, wherever I go, I will create a more peaceful, 420 00:29:20,109 --> 00:29:24,329 Suze: joyful and loving world. And if you do that, I 421 00:29:24,339 --> 00:29:30,939 Suze: promise you, you will be unstoppable. See you Thursday, everybody. 422 00:29:30,949 --> 00:29:31,959 Suze: Bye bye.