1 00:00:46,159 --> 00:00:49,360 KT: Hi everybody. Welcome to the Women and Money podcast and 2 00:00:49,360 --> 00:00:53,639 KT: Ask KT anything because I know all about Boxing Day. 3 00:00:53,759 --> 00:00:56,159 KT: Matter of fact, I know more about Boxing Day than 4 00:00:56,159 --> 00:00:58,880 KT: Miss Suze, who's sitting in the studio with me right now. 5 00:00:58,880 --> 00:01:02,110 Suze: And giving her a look like, what... 6 00:01:02,110 --> 00:01:03,119 KT: ...is Boxing Day? 7 00:01:03,119 --> 00:01:04,989 Suze: I know what Boxing Day is. 8 00:01:05,000 --> 00:01:08,239 KT: Boxing Day is one of my it's my favorite day 9 00:01:08,239 --> 00:01:09,160 KT: after Christmas. 10 00:01:09,279 --> 00:01:10,319 Suze: Now why is that? 11 00:01:10,720 --> 00:01:13,480 KT: Because it's when you have all leftovers and you box 12 00:01:13,480 --> 00:01:14,029 KT: them up. 13 00:01:15,269 --> 00:01:16,620 Suze: You know that is first of all wait... 14 00:01:17,139 --> 00:01:18,080 KT: That is the truth. 15 00:01:18,370 --> 00:01:20,300 Suze: We hope you had a great 16 00:01:20,300 --> 00:01:22,669 KT: Christmas and Hanukkah. 17 00:01:22,779 --> 00:01:24,220 KT: Oh wait, wait, wait, Kwanzaa. 18 00:01:24,309 --> 00:01:25,809 Suze: So happy Kwanzaa, everybody. 19 00:01:26,480 --> 00:01:27,149 KT: Oh, all three at once. 20 00:01:27,339 --> 00:01:31,699 Suze: Yeah, pretty much so, but everybody, before we go on. 21 00:01:32,410 --> 00:01:35,169 Suze: Welcome to the Women and Money podcast as well as 22 00:01:35,169 --> 00:01:42,699 Suze: everybody smart enough to listen, and this is December 26, 2024. 23 00:01:42,730 --> 00:01:46,730 Suze: And as Ms. Travis just told you, it is Boxing Day. 24 00:01:47,290 --> 00:01:49,330 Suze: Now let me just tell you briefly how I learned 25 00:01:49,330 --> 00:01:50,449 Suze: about Boxing Day. 26 00:01:51,160 --> 00:01:52,110 Suze: Do you remember how I 27 00:01:52,110 --> 00:01:52,309 Suze: learned? 28 00:01:52,519 --> 00:01:56,300 KT: Yes I do. We were in Hong Kong and everybody 29 00:01:56,589 --> 00:02:01,699 KT: that was in, um, a helper for all the Asian 30 00:02:01,699 --> 00:02:05,180 KT: families were all gathered in the square downtown. 31 00:02:05,410 --> 00:02:09,389 KT: And they all had boxed lunches and that was Boxing Day. 32 00:02:09,559 --> 00:02:13,440 KT: It's when you have all of the leftovers from Christmas 33 00:02:13,440 --> 00:02:14,279 KT: for the 34 00:02:14,279 --> 00:02:14,990 KT: next day, 35 00:02:15,080 --> 00:02:18,240 Suze: And I was like, what are they all doing, KT? 36 00:02:18,490 --> 00:02:20,479 Suze: And that's when she told me. 37 00:02:20,479 --> 00:02:21,240 KT: Boxing Day. 38 00:02:21,360 --> 00:02:24,830 Suze: So today I have to eat everything out of a box, 39 00:02:24,949 --> 00:02:29,038 Suze: but that is besides the point. All right, KT. 40 00:02:30,210 --> 00:02:31,380 Suze: Did you have a good Christmas? 41 00:02:31,490 --> 00:02:32,119 KT: I did 42 00:02:32,119 --> 00:02:35,809 KT: a very, very, um, a simple Christmas. It was lovely 43 00:02:35,809 --> 00:02:39,160 KT: just being here on the island with very few people. 44 00:02:39,490 --> 00:02:42,529 KT: Colo and you and I enjoyed it, and his wife 45 00:02:42,529 --> 00:02:47,089 KT: arrives today, and we're very excited to welcome Annie for 46 00:02:47,089 --> 00:02:48,490 KT: the very first time. 47 00:02:48,960 --> 00:02:51,869 Suze: And he's so nervous. I can't even begin to tell you... 48 00:02:51,869 --> 00:02:55,428 Suze: he is KT. She's looking at me like, oh, don't 49 00:02:55,429 --> 00:02:56,869 Suze: say that because he listens to these, 50 00:02:57,679 --> 00:02:58,880 KT: We have a we have a 51 00:02:58,880 --> 00:03:03,270 KT: big welcome sign in his apartment, and he's very, very 52 00:03:03,270 --> 00:03:04,970 KT: happy that she's coming finally. 53 00:03:05,149 --> 00:03:09,259 Suze: But we hope all of you enjoyed the holidays so far, 54 00:03:09,309 --> 00:03:12,389 Suze: no matter what tradition you happen to be celebrating. 55 00:03:12,850 --> 00:03:16,419 Suze: But one thing that always goes on no matter what 56 00:03:16,419 --> 00:03:21,869 Suze: is needing to celebrate your money, your financial affairs, and 57 00:03:21,869 --> 00:03:26,190 Suze: that's what this podcast is all about a celebration of 58 00:03:26,190 --> 00:03:29,550 Suze: you and your money. KT, what is the first 59 00:03:29,550 --> 00:03:30,259 Suze: question? 60 00:03:30,350 --> 00:03:33,299 KT: OK, the first question I have is. 61 00:03:33,770 --> 00:03:37,770 KT: Greetings Suze and KT. Thank you for always putting a 62 00:03:37,770 --> 00:03:41,210 KT: smile on my face. I love your banter. I love 63 00:03:41,210 --> 00:03:46,089 KT: KT's sweet voice, and Suze, your laugh is adorable. I 64 00:03:46,089 --> 00:03:49,889 KT: have a $25,000 bank CD maturing in. 65 00:03:50,005 --> 00:03:54,875 KT: February 2025. Here's my question. Should I pay off my 66 00:03:54,875 --> 00:03:58,554 KT: car loan to reduce my monthly expenses so I can 67 00:03:58,554 --> 00:04:01,315 KT: save a little more, or what should I do with 68 00:04:01,315 --> 00:04:05,354 KT: the $25,000 if you do not recommend I pay off 69 00:04:05,354 --> 00:04:09,714 KT: my car loan? I'm 72 years old. My monthly auto 70 00:04:09,714 --> 00:04:16,024 KT: payment is $351. The maturity date on that loan is 71 00:04:16,315 --> 00:04:19,475 KT: uh November, November 2026. 72 00:04:19,880 --> 00:04:23,880 KT: And the loan payoff amount is about 8000 73 00:04:23,880 --> 00:04:24,290 KT: dollars. 74 00:04:24,390 --> 00:04:26,058 Suze: Does she happen to tell you what her... 75 00:04:26,149 --> 00:04:27,709 KT: Her income? She has Social Security... 76 00:04:27,709 --> 00:04:31,190 Suze: But what is her income now her total amount of 77 00:04:31,190 --> 00:04:32,140 Suze: income she has. 78 00:04:32,549 --> 00:04:36,269 KT: OK, so the total amount of income she has is 79 00:04:36,269 --> 00:04:38,988 KT: $ 4,965 monthly. 80 00:04:39,428 --> 00:04:42,229 Suze: Now tell me, what does it give you the total 81 00:04:42,230 --> 00:04:43,910 Suze: expenses she has per month? 82 00:04:45,160 --> 00:04:49,670 KT: Yes, her expenses per month are about $4700. 0, that's 83 00:04:49,670 --> 00:04:50,829 KT: kind of tight, Suze. 84 00:04:51,070 --> 00:04:54,428 Suze: All right, so let me answer this then, and this 85 00:04:54,428 --> 00:04:58,555 Suze: is from Sharon. All right, Sharon. 86 00:04:58,555 --> 00:04:59,230 KT: That's tight, isn't it? 87 00:05:00,149 --> 00:05:02,140 Suze: All right, so what would you tell her? Is this your quizzy? 88 00:05:02,390 --> 00:05:04,950 KT: Well, I, I don't know if I wouldn't pay off 89 00:05:04,950 --> 00:05:09,469 KT: the car loan. I'd be real careful with that $25,000 90 00:05:09,470 --> 00:05:11,260 KT: because I think she needs some of it. 91 00:05:11,390 --> 00:05:12,070 Suze: I don't think so. 92 00:05:12,186 --> 00:05:14,976 KT: All right, you're the, you're the one that tells everyone 93 00:05:14,976 --> 00:05:16,885 KT: what to do, what should Sharon do. 94 00:05:17,406 --> 00:05:19,895 Suze: So what I would do if I were you, because 95 00:05:19,895 --> 00:05:23,376 Suze: if you look further down on this email, KT, she 96 00:05:23,376 --> 00:05:27,596 Suze: does have $26,000 in a money market fund, $40,000 in 97 00:05:27,596 --> 00:05:32,135 Suze: a Roth, $70,000 in IRA, $19,000 in mutual funds, and 98 00:05:32,135 --> 00:05:38,775 Suze: $30,000 in bonds. So this $25,000 is from a CD 99 00:05:38,776 --> 00:05:39,096 Suze: that she hasn't 100 00:05:39,212 --> 00:05:43,201 Suze: even listed here, really. So what would you have her 101 00:05:43,201 --> 00:05:44,871 Suze: do knowing she has that money? 102 00:05:45,321 --> 00:05:47,032 KT: Probably get rid of that car loan. 103 00:05:47,242 --> 00:05:48,131 Suze: You would have her take the 104 00:05:48,130 --> 00:05:50,111 KT: 7, it's about $7000 right? 105 00:05:50,122 --> 00:05:51,272 Suze: Yeah, yeah, 106 00:05:51,511 --> 00:05:52,082 Suze: All right, so... 107 00:05:52,242 --> 00:05:52,791 KT: Pay that off. 108 00:05:53,402 --> 00:05:58,681 KT: So that will reduce the expenses by $350 a month, right? 109 00:05:59,190 --> 00:05:59,562 Suze: That's my girl. 110 00:05:59,682 --> 00:06:00,241 KT: There you go, 111 00:06:00,252 --> 00:06:03,282 Suze: So that's what you would do, ding ding ding ding. 112 00:06:03,291 --> 00:06:03,302 KT: Good 113 00:06:06,152 --> 00:06:06,190 KT: job, KT. 114 00:06:07,149 --> 00:06:09,549 Suze: All right, so Sharon, here's what I would tell you 115 00:06:09,549 --> 00:06:13,309 Suze: if you did the numbers, just strictly the numbers, you 116 00:06:13,309 --> 00:06:17,738 Suze: would be financially better off if you did not pay 117 00:06:17,738 --> 00:06:21,470 Suze: off the car loan with that money and you actually 118 00:06:21,470 --> 00:06:23,970 Suze: invested it, but KT's looking at me because she knows 119 00:06:23,970 --> 00:06:27,149 Suze: I just said she was right and you invested it. 120 00:06:27,630 --> 00:06:31,880 Suze: You would be ahead over the next 23 months by 121 00:06:31,880 --> 00:06:36,709 Suze: quite a few hundred dollars. However, what is the goal 122 00:06:36,709 --> 00:06:38,140 Suze: of money, KT? 123 00:06:38,600 --> 00:06:39,380 KT: Feel secure. 124 00:06:39,450 --> 00:06:40,118 Suze: Oh, you've got it... 125 00:06:40,839 --> 00:06:45,399 KT: I'm right on point, as we say on point... on Boxing Day. 126 00:06:47,678 --> 00:06:52,070 Suze: I knew you were gonna say that. All right, anyway, 127 00:06:52,399 --> 00:06:53,040 Suze: and 128 00:06:53,459 --> 00:06:58,059 Suze: As I look at your expenses, you are only bringing 129 00:06:58,059 --> 00:07:04,209 Suze: in $265 more a month than you have going out. 130 00:07:04,579 --> 00:07:08,700 Suze: That is cutting it really close. If you took that 131 00:07:08,700 --> 00:07:15,779 Suze: $7,917 and paid it off, you'd have an additional $351 132 00:07:15,779 --> 00:07:18,420 Suze: a month that you wouldn't have to pay. So that's 133 00:07:18,420 --> 00:07:22,369 Suze: like you'd have $616 more per month. 134 00:07:23,260 --> 00:07:27,899 Suze: Than what you have in expenses now you have more cushion, 135 00:07:27,940 --> 00:07:31,239 Suze: and that will make you feel more secure. And I 136 00:07:31,239 --> 00:07:33,820 Suze: just have a feeling when you feel more secure your 137 00:07:33,820 --> 00:07:36,779 Suze: expenses will also go down because you won't be spending 138 00:07:36,779 --> 00:07:39,739 Suze: as much. So if I were you, I would so 139 00:07:39,739 --> 00:07:41,859 Suze: pay it off. I cannot tell you. 140 00:07:42,140 --> 00:07:43,750 KT: My next question is from Janet. Dear KT 141 00:07:43,795 --> 00:07:48,145 KT: and Suze, I took out an annuity and then I 142 00:07:48,145 --> 00:07:52,626 KT: found you. Actually, since listening to your podcast and reading 143 00:07:52,626 --> 00:07:57,055 KT: and rereading the Ultimate Retirement Guide for the past 3 years, 144 00:07:57,346 --> 00:08:00,756 KT: I now have emergency savings and all of my must-have 145 00:08:00,756 --> 00:08:04,385 KT: documents taken care of. My certified pre-owned 146 00:08:04,592 --> 00:08:07,391 KT: car will be paid off in February, and I have 147 00:08:07,391 --> 00:08:10,701 KT: a plan in place to pay off my home. Thank 148 00:08:10,701 --> 00:08:15,231 KT: you for all your advice and expertise. I'm 68 and 149 00:08:15,231 --> 00:08:18,881 KT: retired with a pension from teaching. We love teachers, don't we? 150 00:08:18,971 --> 00:08:19,701 Suze: Oh, so much. 151 00:08:19,951 --> 00:08:22,861 KT: OK, so Janet's saying now on to getting rid of 152 00:08:22,861 --> 00:08:23,631 KT: my annuity. 153 00:08:23,752 --> 00:08:24,312 Suze: Did you have a 154 00:08:24,312 --> 00:08:24,992 Suze: favorite teacher? 155 00:08:26,329 --> 00:08:28,420 KT: Um, I did. 156 00:08:28,850 --> 00:08:29,329 Suze: Who? 157 00:08:29,850 --> 00:08:32,609 KT: I did, um, and Bob Waldron. 158 00:08:33,780 --> 00:08:34,330 KT: Bob Walter, 159 00:08:34,460 --> 00:08:35,080 Suze: Why was Bob your favorite teacher? 160 00:08:35,940 --> 00:08:38,500 KT: he taught history. I just loved him, 161 00:08:38,900 --> 00:08:39,539 Suze: yeah, 162 00:08:39,700 --> 00:08:43,559 KT: and he also loved performing arts. He, he was a 163 00:08:43,559 --> 00:08:48,699 KT: fabulous man. This was in high school, but young high school. He, 164 00:08:48,780 --> 00:08:51,369 KT: he was the one that put on all the school plays, 165 00:08:51,640 --> 00:08:54,900 KT: and I painted all the scenery for every play, and 166 00:08:54,900 --> 00:08:58,619 KT: my twin sister was usually the lead. We were very popular, 167 00:08:58,729 --> 00:09:01,780 KT: Lynn and I, but I loved him. OK, ready. 168 00:09:02,400 --> 00:09:03,270 KT: Did you? 169 00:09:03,710 --> 00:09:04,570 Suze: Actually, I did. 170 00:09:04,679 --> 00:09:05,760 KT: Who was your favorite? 171 00:09:05,880 --> 00:09:09,030 Suze: Well, there were many from Mrs. Brennan and Mrs. Hazel 172 00:09:09,030 --> 00:09:14,228 Suze: and Mrs. O'Donnell and Mister Edwards. However, my favorite teacher 173 00:09:14,799 --> 00:09:19,710 Suze: was Moura Kraszewski, and she was my Hebrew school teacher 174 00:09:20,479 --> 00:09:23,000 Suze: and as a little girl, I never wanted to go 175 00:09:23,000 --> 00:09:27,000 Suze: to Brownies or be in Girl Scouts. I wanted to 176 00:09:27,000 --> 00:09:31,200 Suze: go to Hebrew school at a very young age, so. 177 00:09:31,340 --> 00:09:34,570 Suze: Every day I would go to regular school and then 178 00:09:34,570 --> 00:09:36,840 Suze: I'd have to get on a bus and go all 179 00:09:36,840 --> 00:09:39,770 Suze: the way down to where the synagogue was and they 180 00:09:39,770 --> 00:09:42,880 Suze: had Hebrew school and I would be in there for 181 00:09:42,880 --> 00:09:46,489 Suze: a few hours every day until my mom and dad 182 00:09:46,489 --> 00:09:48,690 Suze: were off work and they could pick me up because 183 00:09:48,690 --> 00:09:52,770 Suze: we only had one car and Moura Kraszewski and Mora 184 00:09:52,770 --> 00:09:56,609 Suze: is Hebrew for teacher there was something that I just 185 00:09:56,609 --> 00:09:59,090 Suze: loved about this woman. 186 00:09:59,400 --> 00:10:02,349 Suze: And every Friday when we would go to synagogue because 187 00:10:02,349 --> 00:10:04,189 Suze: I would say please let's go. Can you imagine a 188 00:10:04,190 --> 00:10:06,189 Suze: little kid saying, Can we go to services? 189 00:10:06,549 --> 00:10:06,869 KT: I can't. 190 00:10:06,869 --> 00:10:10,030 Suze: And so we would go and I would ask if 191 00:10:10,030 --> 00:10:13,179 Suze: I could sit with her and I would sit with 192 00:10:13,179 --> 00:10:15,710 Suze: her and she loved her. I loved her and she 193 00:10:15,710 --> 00:10:18,830 Suze: would hold my hand and she would say, you know, Suzie, 194 00:10:18,869 --> 00:10:20,789 Suze: I taught you the alphabet. 195 00:10:21,320 --> 00:10:25,210 Suze: And she did. And now that you know the alphabet, 196 00:10:25,500 --> 00:10:28,469 Suze: just know that God will put together all the letters 197 00:10:28,469 --> 00:10:32,549 Suze: for you into words and you'll understand everything because the 198 00:10:32,549 --> 00:10:36,520 Suze: service was all in Hebrew and there was just something 199 00:10:36,520 --> 00:10:37,630 Suze: about this woman. 200 00:10:38,409 --> 00:10:42,590 Suze: That I loved and gave me a faith, not necessarily 201 00:10:42,590 --> 00:10:48,429 Suze: in Judaism, but a faith that in in God, the 202 00:10:48,429 --> 00:10:49,630 Suze: God for all. 203 00:10:50,280 --> 00:10:51,098 KT: She inspired you. 204 00:10:51,239 --> 00:10:52,340 KT: She inspired me in a 205 00:10:52,340 --> 00:10:53,939 Suze: big way that in my face? 206 00:10:55,359 --> 00:10:57,400 KT: Suze's getting all excited reminiscing. 207 00:10:57,520 --> 00:10:59,989 Suze: And I wrote her a letter when I turned 20. 208 00:11:00,239 --> 00:11:02,479 Suze: You did, and I told her what she meant to 209 00:11:02,479 --> 00:11:04,960 Suze: me and I said, and she was. 210 00:11:05,075 --> 00:11:07,674 Suze: Older and I said one day I bet I'm gonna 211 00:11:07,674 --> 00:11:10,434 Suze: grow up and you're gonna be proud of who you 212 00:11:10,434 --> 00:11:13,755 Suze: helped make me but what's funny is I have no 213 00:11:13,755 --> 00:11:16,515 Suze: idea she ever saw what happened to me and I anyway, 214 00:11:16,635 --> 00:11:19,984 Suze: don't get me teary eyed... come on, what's the next question? 215 00:11:21,190 --> 00:11:24,789 KT: All right, this is from Janet. Look at you. You 216 00:11:24,789 --> 00:11:25,549 KT: are getting 217 00:11:25,549 --> 00:11:26,709 Suze: emotional so much. 218 00:11:26,830 --> 00:11:29,849 Suze: You did love your doesn't it feel good to love somebody. 219 00:11:29,909 --> 00:11:32,909 Suze: I mean really love somebody, not because you're in a 220 00:11:32,909 --> 00:11:36,189 Suze: relationship with them or whatever, just love them for what 221 00:11:36,190 --> 00:11:36,830 Suze: they gave you. 222 00:11:36,840 --> 00:11:40,700 KT: So Janet, be so proud that you are a retired teacher, 223 00:11:41,150 --> 00:11:44,789 KT: and I hope you had you had students like Suze, 224 00:11:44,950 --> 00:11:45,909 KT: like little Suze. 225 00:11:46,210 --> 00:11:49,039 KT: So now on, she says, now Suze on to getting 226 00:11:49,039 --> 00:11:52,549 KT: rid of my annuity through equitable. I have a variable 227 00:11:52,549 --> 00:11:57,239 KT: and index linked deferred annuity contract Series B that I 228 00:11:57,239 --> 00:12:00,549 KT: took out with money my dad left me when he died. 229 00:12:00,880 --> 00:12:07,109 KT: In the six years it went from $50,000 to $68,300. 230 00:12:07,400 --> 00:12:10,840 KT: If I figured it correctly, that is a 36. 231 00:12:11,309 --> 00:12:17,079 KT: 6% rate of growth. The question is, do I have 232 00:12:17,080 --> 00:12:20,880 KT: to cash out the annuity or can a brokerage firm 233 00:12:20,880 --> 00:12:25,770 KT: have the money transferred for me? Or she's now asking, 234 00:12:25,890 --> 00:12:30,090 KT: Can you do a Suze School. The teacher wants you 235 00:12:30,090 --> 00:12:33,090 KT: to do a Suze School. So how does she, can 236 00:12:33,090 --> 00:12:33,890 KT: she do that? 237 00:12:34,250 --> 00:12:35,409 Suze: Wanna know what's funny, KT. 238 00:12:37,429 --> 00:12:40,549 Suze: I'll tell you what's funny here is that I actually 239 00:12:40,549 --> 00:12:44,809 Suze: saw this and I wrote Janet and I told her 240 00:12:44,809 --> 00:12:46,949 Suze: exactly what I thought she should do. 241 00:12:47,309 --> 00:12:48,789 KT: Well, tell us what you told Janet. 242 00:12:49,150 --> 00:12:52,419 Suze: But before I tell you what I told Janet to do, 243 00:12:52,789 --> 00:12:57,309 Suze: can I just do a very quick Suze School on 244 00:12:57,309 --> 00:13:00,419 Suze: why annuities are so bad? 245 00:13:00,750 --> 00:13:01,669 KT: Go for it. 246 00:13:02,099 --> 00:13:08,030 Suze: So Janet put in $50,000.06 years ago. 247 00:13:08,929 --> 00:13:18,108 Suze: It's now worth $68,300 so in six years it grew $18,300. 248 00:13:18,760 --> 00:13:24,070 Suze: That happens to be only a 5.4% approximately. 249 00:13:25,169 --> 00:13:30,770 Suze: Compounded annual rate of growth, which is horrific in today's 250 00:13:30,770 --> 00:13:35,238 Suze: market in the last 6 years. That is horrific. You, 251 00:13:35,369 --> 00:13:38,369 Suze: Janet were in an annuity that was in an indexed 252 00:13:38,369 --> 00:13:42,210 Suze: annuity that was indexed according to the Standard and Poor's 253 00:13:42,210 --> 00:13:46,569 Suze: 500 index this year alone. It's up almost 30%. Are 254 00:13:46,570 --> 00:13:47,809 Suze: you kidding me? 255 00:13:48,299 --> 00:13:53,219 Suze: So number one, an indexed annuity is not a good 256 00:13:53,219 --> 00:13:56,299 Suze: investment because you only get a percentage of what the 257 00:13:56,299 --> 00:13:58,978 Suze: index goes up. You do not get the entire thing. 258 00:13:59,020 --> 00:14:03,659 Suze: That's number one. Number 2, Janet, if you decide to 259 00:14:03,659 --> 00:14:11,539 Suze: surrender this annuity now, then all $18,300 of growth is 260 00:14:11,539 --> 00:14:14,770 Suze: gonna be taxable to you as ordinary income. 261 00:14:15,479 --> 00:14:18,880 Suze: If you had simply put that $50,000 in 262 00:14:19,799 --> 00:14:23,599 Suze: a mutual fund. Same thing, mutual fund, ETF, whatever it 263 00:14:23,599 --> 00:14:26,159 Suze: may be, and you wanted to cash out now and 264 00:14:26,159 --> 00:14:27,830 Suze: it's been 6 years. 265 00:14:28,719 --> 00:14:33,219 Suze: That would be taxed to you as capital gains, big, 266 00:14:33,309 --> 00:14:38,390 Suze: big difference. Number 2, let's just say you decided to 267 00:14:38,390 --> 00:14:41,789 Suze: keep that annuity. You died, and now it goes down 268 00:14:41,789 --> 00:14:45,429 Suze: to your beneficiaries. They are going to owe ordinary income 269 00:14:45,429 --> 00:14:53,260 Suze: tax on anything above that $50,000. In this case, $18,300. 270 00:14:53,830 --> 00:14:56,679 Suze: If you had that in a mutual fund and you 271 00:14:56,679 --> 00:15:01,719 Suze: died and they inherited it, guess what, that $18,300 would 272 00:15:01,719 --> 00:15:04,919 Suze: be non-taxable to them because they would get a step 273 00:15:04,919 --> 00:15:09,479 Suze: up in cost basis on it. So do all start 274 00:15:09,479 --> 00:15:13,520 Suze: to now understand why I don't like annuities? One thing 275 00:15:13,520 --> 00:15:15,559 Suze: I also just have to say, KT. 276 00:15:16,119 --> 00:15:20,320 Suze: If Janet was not 68, let's say she was 57, 277 00:15:20,530 --> 00:15:24,330 Suze: she's under 59.5, and she cashed this out, there would 278 00:15:24,330 --> 00:15:27,440 Suze: be a 10% federal tax penalty 279 00:15:28,530 --> 00:15:29,760 Suze: on it number one. 280 00:15:30,549 --> 00:15:34,390 Suze: Number 2 is that all annuities in most cases come 281 00:15:34,390 --> 00:15:37,630 Suze: with a surrender charge, and she could very well still 282 00:15:37,630 --> 00:15:41,989 Suze: be under a surrender charge of 4, 5, 3%, whatever 283 00:15:41,989 --> 00:15:46,390 Suze: it is, if she cashes it out before the surrender 284 00:15:46,390 --> 00:15:51,070 Suze: period is over. Yeah, what should she so assuming, my 285 00:15:51,070 --> 00:15:54,780 Suze: dear Janet, as I wrote you that you did put 286 00:15:54,780 --> 00:15:59,429 Suze: in $50,000 with money you've already paid taxes on. 287 00:16:00,010 --> 00:16:04,000 Suze: And assuming that you are no longer in a surrender 288 00:16:04,000 --> 00:16:08,719 Suze: period for this annuity, if it were me, I would 289 00:16:08,719 --> 00:16:15,359 Suze: surrender $9150 right now before the end of the year, 290 00:16:15,479 --> 00:16:20,830 Suze: which is half of your gain. That's what I would do, 291 00:16:21,000 --> 00:16:22,880 Suze: and I would pay taxes on it. 292 00:16:23,289 --> 00:16:27,869 Suze: Now what's interesting is that all interest or gains are 293 00:16:27,869 --> 00:16:32,969 Suze: taxed before you get your original money back. January 1st, 294 00:16:33,150 --> 00:16:37,909 Suze: I would then just surrender the rest of the $59,150 295 00:16:37,989 --> 00:16:43,469 Suze: which is totally what's left. You'd owe taxes on $9150 296 00:16:43,469 --> 00:16:47,309 Suze: for next year, taxes on that, and that's what I 297 00:16:47,309 --> 00:16:52,309 Suze: would do just that easy. All right KT, next question. What? 298 00:16:53,159 --> 00:16:55,190 KT: I think I'm still spinning on what to do. 299 00:16:55,630 --> 00:16:57,390 Suze: No, but let me tell you why I took so 300 00:16:57,390 --> 00:17:00,869 Suze: much time with that. All people think about when they 301 00:17:00,869 --> 00:17:04,930 Suze: buy an annuity is what the financial salesperson told them, 302 00:17:05,390 --> 00:17:09,790 Suze: which is you can make money tax deferred. You don't 303 00:17:09,790 --> 00:17:12,829 Suze: have to pay taxes on this until you withdraw the money. 304 00:17:13,409 --> 00:17:16,609 Suze: Blah blah blah. If you invest in this and you 305 00:17:16,609 --> 00:17:19,359 Suze: die and you have less in here, if it's worth 306 00:17:19,359 --> 00:17:22,918 Suze: less than your original amount, your beneficiaries will get as 307 00:17:22,917 --> 00:17:26,479 Suze: much as you originally put in. That's how it is sold. 308 00:17:26,920 --> 00:17:29,920 Suze: What most people don't understand is if you invest in 309 00:17:29,920 --> 00:17:33,310 Suze: an ETF or a mutual fund or even an individual stock, 310 00:17:33,680 --> 00:17:37,589 Suze: you don't pay taxes on it until you sell it, 311 00:17:38,359 --> 00:17:42,198 Suze: so it's tax deferred anyway but at a capital gains 312 00:17:42,199 --> 00:17:46,439 Suze: rate versus ordinary income tax and on and on. So 313 00:17:46,439 --> 00:17:48,680 Suze: that's why I went into it so much. Just do 314 00:17:48,680 --> 00:17:51,270 Suze: me all a favor. Can you stay away from them? 315 00:17:51,400 --> 00:17:51,910 Suze: All right, 316 00:17:52,030 --> 00:17:54,959 KT: All right. Next question is from Teresa. 317 00:17:55,469 --> 00:17:58,909 KT: This is a little this question really confuses me. It says, 318 00:17:59,099 --> 00:18:01,839 KT: what is the best credit score to have when buying 319 00:18:01,839 --> 00:18:07,968 KT: a home? 720 or more and which FICO score is used? 320 00:18:08,280 --> 00:18:13,550 KT: I don't understand this. She writes 5,6,4,7,8 10. What does 321 00:18:13,550 --> 00:18:14,800 KT: that mean, Suze? 322 00:18:15,410 --> 00:18:17,839 Suze: If that confused all of you as well. 323 00:18:18,859 --> 00:18:23,129 Suze: There are many different FICO scores, believe it or not, 324 00:18:23,459 --> 00:18:28,359 Suze: many re iterations as to how FICO figures what your 325 00:18:28,359 --> 00:18:32,900 Suze: FICO score is. Again, FICO stands for Fair Isaac Corporation. 326 00:18:33,239 --> 00:18:38,540 Suze: The company that originally created the score and most creditors 327 00:18:38,839 --> 00:18:42,469 Suze: only use a FICO score. They do not use a 328 00:18:42,469 --> 00:18:45,189 Suze: Vantage score, so any of those scores that maybe you 329 00:18:45,189 --> 00:18:49,349 Suze: get for free, that isn't what 80% of your creditors 330 00:18:49,349 --> 00:18:50,349 Suze: actually use. 331 00:18:51,130 --> 00:18:54,409 Suze: If you're buying a home, and I'll just break this 332 00:18:54,410 --> 00:18:57,050 Suze: down for all of you. KT, you're gonna die because 333 00:18:57,050 --> 00:18:58,760 Suze: here's another long one for you. 334 00:18:59,770 --> 00:19:01,130 KT: You're gonna do a FICO Suze School? 335 00:19:01,400 --> 00:19:03,979 Suze: I am, so FICO score 8. 336 00:19:04,859 --> 00:19:09,649 Suze: 8 is the one that's most widely used by creditors 337 00:19:09,900 --> 00:19:13,300 Suze: for general credit decisions and that kind of includes whether 338 00:19:13,300 --> 00:19:15,900 Suze: they're gonna give you a credit card or not or 339 00:19:15,900 --> 00:19:21,339 Suze: a personal loan and sometimes even auto loans. However, it 340 00:19:21,339 --> 00:19:24,540 Suze: depends on what the specific score is that the lender 341 00:19:24,540 --> 00:19:27,739 Suze: happens to use, so you should be asking them. 342 00:19:28,209 --> 00:19:31,829 Suze: But again, FICO score 8 is the score that is 343 00:19:31,829 --> 00:19:36,550 Suze: most commonly used for just general credit decisions, and I 344 00:19:36,550 --> 00:19:37,389 Suze: hope I get this right. 345 00:19:37,469 --> 00:19:38,069 KT: It's most 346 00:19:38,069 --> 00:19:41,069 KT: popular used by banks and creditors, things like that. 347 00:19:41,349 --> 00:19:46,949 Suze: However, FICO score number 2, 4, and 5. 348 00:19:48,239 --> 00:19:52,589 Suze: Right, are the ones that are mostly used by mortgage lenders. 349 00:19:53,420 --> 00:19:57,089 Suze: And these are the classic FICO scores KT that you 350 00:19:57,089 --> 00:20:00,879 Suze: and I used to talk about years and years ago 351 00:20:01,209 --> 00:20:05,170 Suze: and are part of the models that are mandated by 352 00:20:05,170 --> 00:20:09,050 Suze: Fannie Mae and Freddie Mac. Now let's say you want 353 00:20:09,050 --> 00:20:12,079 Suze: to get an auto loan. Let's just say you do. 354 00:20:12,410 --> 00:20:15,250 Suze: The auto score 8 or 9 are the ones that 355 00:20:15,250 --> 00:20:19,260 Suze: are usually used by auto lenders, just so you know. 356 00:20:19,819 --> 00:20:24,270 Suze: And if you're really doing a credit application, as I 357 00:20:24,270 --> 00:20:26,639 Suze: said before, you're sticking with number 8. 358 00:20:27,130 --> 00:20:29,089 Suze: And that's kind of what you need to know. 359 00:20:29,369 --> 00:20:31,650 KT: I, I think we have to clarify if, if, if 360 00:20:31,650 --> 00:20:36,489 KT: I understand it correctly, Suze, these numbers are the numbers 361 00:20:36,489 --> 00:20:40,410 KT: of the score system used by creditors, banks, so on 362 00:20:40,410 --> 00:20:40,889 KT: and so forth... 363 00:20:41,089 --> 00:20:45,449 Suze: And by FICO. Yes, now there's two different numbers. There's 364 00:20:45,449 --> 00:20:49,688 Suze: your actual FICO score KT and FICO scores 365 00:20:49,796 --> 00:20:54,265 Suze: run anywhere from like 300 up to 850 to answer 366 00:20:54,265 --> 00:20:58,586 Suze: Teresa's question, you want a FICO score of about 760 367 00:20:58,586 --> 00:21:02,306 Suze: or above doesn't matter 760 all the way to 850 368 00:21:02,306 --> 00:21:05,296 Suze: it'll be the same to get the lowest interest rate, 369 00:21:05,546 --> 00:21:09,696 Suze: but you need to know that is your FICO score 370 00:21:10,145 --> 00:21:12,426 Suze: when on the model number 2 371 00:21:12,722 --> 00:21:16,251 Suze: 4 or 5, which is what is used for mortgages. 372 00:21:16,251 --> 00:21:19,281 KT: And I think I just want to say something. The 373 00:21:19,281 --> 00:21:24,041 KT: model numbers that are stated here from her, her asking 374 00:21:24,041 --> 00:21:28,962 KT: the question are numbers that are used B2B. They're not, yeah, 375 00:21:29,082 --> 00:21:30,401 KT: so we have to explain to everybody. 376 00:21:30,561 --> 00:21:33,602 Suze: But you have to know which model to use. She 377 00:21:33,602 --> 00:21:35,081 Suze: obviously knew about them. 378 00:21:35,829 --> 00:21:38,329 Suze: So it's, you have to look at your score for 379 00:21:38,329 --> 00:21:41,439 Suze: that model to know where you really fall. 380 00:21:41,650 --> 00:21:41,969 KT: OK, 381 00:21:42,130 --> 00:21:42,679 Suze: That's all. 382 00:21:43,599 --> 00:21:45,229 Suze: It's really not that complicated. 383 00:21:45,640 --> 00:21:48,239 KT: But I, I don't want people to be confused after 384 00:21:48,239 --> 00:21:52,760 KT: teaching them for two decades about their personal FICO score 385 00:21:53,920 --> 00:21:57,479 KT: versus a model number used by a creditor or bank. 386 00:21:57,479 --> 00:21:59,359 Suze: But do you understand why it matters? 387 00:21:59,500 --> 00:22:00,359 KT: Yes, I do. All right, 388 00:22:00,660 --> 00:22:04,839 Suze: Then they shouldn't be confused if you understand. All right, sorry, KT. 389 00:22:07,239 --> 00:22:09,010 KT: OK, are we ready to move on? 390 00:22:09,089 --> 00:22:09,609 Suze: I am. 391 00:22:09,900 --> 00:22:15,520 KT: All right. So this is next question. Is a Merry Christmas. Hello, 392 00:22:15,650 --> 00:22:18,050 KT: Suze and KT. I would like to know how you 393 00:22:18,050 --> 00:22:22,050 KT: feel about Robin Hood. Is it good for buying and 394 00:22:22,050 --> 00:22:26,489 KT: selling stocks? This is from Marilyn I tell Marilyn, what, 395 00:22:26,569 --> 00:22:28,209 KT: what do you think about Robin Hood? I used to 396 00:22:28,209 --> 00:22:29,609 KT: call Suze Robin Hood. 397 00:22:30,449 --> 00:22:31,650 Suze: What made you stop? 398 00:22:32,469 --> 00:22:35,540 KT: Because there's a company called Robin Hood. I don't want 399 00:22:35,540 --> 00:22:38,410 KT: them to think you're endorsing Robin Hood, the company. 400 00:22:38,550 --> 00:22:42,540 Suze: Well, I kind of am, in that I like them. 401 00:22:42,949 --> 00:22:44,750 Suze: A few years ago, I want to have let you 402 00:22:44,750 --> 00:22:48,030 Suze: touch them with a 10 foot pole, seriously, but they 403 00:22:48,030 --> 00:22:51,188 Suze: have adapted their ways of being, and now I think 404 00:22:51,189 --> 00:22:55,909 Suze: they are a fine brokerage firm that you absolutely can 405 00:22:55,910 --> 00:22:56,469 Suze: invest in. 406 00:22:56,930 --> 00:23:00,260 Suze: They've also been a pretty interesting stock investment if you 407 00:23:00,260 --> 00:23:02,599 Suze: want to speculate as well. Anyway, go on, KT. 408 00:23:02,739 --> 00:23:06,420 KT: Next question from Susan. Hi, Suze and KT. I've been 409 00:23:06,420 --> 00:23:09,659 KT: married to my high school sweetheart for a little over 410 00:23:09,660 --> 00:23:11,780 KT: a year now. We are both 411 00:23:12,344 --> 00:23:16,714 KT: 67 and so grateful to have found each other again. 412 00:23:17,005 --> 00:23:21,415 KT: We are very happy. We both have children from previous marriages, 413 00:23:21,435 --> 00:23:24,084 KT: and I have a will and a trust, leaving my 414 00:23:24,084 --> 00:23:27,084 KT: assets to my children as does he. 415 00:23:27,599 --> 00:23:31,000 KT: Now she said, I'm selling my house in California and 416 00:23:31,000 --> 00:23:35,359 KT: will have a profit of about $700,000. This is my 417 00:23:35,359 --> 00:23:38,199 KT: only asset aside from a small Alliant account and a 418 00:23:38,199 --> 00:23:43,560 KT: Schwab account. My husband has about $80,000 in an IRA. 419 00:23:43,910 --> 00:23:47,689 KT: The house I'm selling is one I inherited from my mother. 420 00:23:47,979 --> 00:23:51,140 KT: I would like to keep this money fairly liquid and 421 00:23:51,140 --> 00:23:55,579 KT: extremely safe with little risk. I may invest 200 to 422 00:23:55,579 --> 00:24:00,979 KT: $300,000 of it in our eventual second home. If we 423 00:24:00,979 --> 00:24:03,780 KT: sell his home as well. My plan is that we 424 00:24:03,780 --> 00:24:07,369 KT: will both contribute equal amounts to the new home. The 425 00:24:07,369 --> 00:24:09,849 KT: rest I would like to put in a combination of 426 00:24:09,849 --> 00:24:13,420 KT: Alliant CDs and maybe a Vanguard VOO. 427 00:24:13,810 --> 00:24:18,000 KT: I would very much appreciate your advice, she said. It's 428 00:24:18,000 --> 00:24:20,319 KT: a little scary, but I know I can trust you, 429 00:24:20,359 --> 00:24:21,630 KT: and I think I can do this. 430 00:24:22,520 --> 00:24:24,750 Suze: So I love that you... 431 00:24:25,520 --> 00:24:27,709 KT: Found her high school sweetheart, 432 00:24:28,000 --> 00:24:30,119 Suze: But you've only been married for a little over a 433 00:24:30,119 --> 00:24:34,718 Suze: year now, which really, Susan is a very, very short 434 00:24:34,719 --> 00:24:38,359 Suze: period of time. It just is regardless of how long 435 00:24:38,359 --> 00:24:41,599 Suze: ago you knew him when you sell the house that 436 00:24:41,599 --> 00:24:43,280 Suze: you have that you inherited. 437 00:24:43,839 --> 00:24:47,550 Suze: And you take 2 or 300,000 of that and put 438 00:24:47,550 --> 00:24:51,829 Suze: it in a house with your husband equal amounts if 439 00:24:51,829 --> 00:24:55,459 Suze: you happen to put it in title joint tenancy with 440 00:24:55,459 --> 00:25:01,270 Suze: right of survivorship, if you were to die, your half 441 00:25:01,270 --> 00:25:03,188 Suze: automatically goes to him. 442 00:25:03,750 --> 00:25:08,369 Suze: And if his half or his trust or will says 443 00:25:08,699 --> 00:25:13,560 Suze: that it's to go to his kids you have disinherited yours. 444 00:25:14,819 --> 00:25:20,739 Suze: How you hold title to property overrides the wishes of 445 00:25:20,739 --> 00:25:26,819 Suze: your trust, your will, his trust, and his will. Understand 446 00:25:26,819 --> 00:25:28,890 Suze: what I'm saying to you here. 447 00:25:29,489 --> 00:25:35,369 Suze: Therefore, you are never to put this $700,000 into his 448 00:25:35,369 --> 00:25:39,209 Suze: name on any level as joint tenants. You are always 449 00:25:39,209 --> 00:25:43,459 Suze: to keep it in your name under your separate account period, 450 00:25:44,410 --> 00:25:45,810 Suze: do you hear me? 451 00:25:46,680 --> 00:25:48,978 Suze: He could be the greatest guy in the world, but 452 00:25:48,979 --> 00:25:54,020 Suze: it is your inheritance for your children. His money is 453 00:25:54,020 --> 00:25:58,438 Suze: his inheritance for his children. So what would I do? 454 00:25:58,709 --> 00:26:01,989 Suze: If you are going to buy a house with him 455 00:26:02,540 --> 00:26:06,250 Suze: and you put 200 or 300,000 in it, you each 456 00:26:06,250 --> 00:26:09,379 Suze: should own it as tenants in common, and you could 457 00:26:09,380 --> 00:26:10,619 Suze: do that within a trust. 458 00:26:11,089 --> 00:26:15,639 Suze: And what that means is that on your death your 459 00:26:15,640 --> 00:26:21,159 Suze: half goes to your children upon his death it goes 460 00:26:21,160 --> 00:26:24,520 Suze: to his children, and you could give each other a 461 00:26:24,520 --> 00:26:27,560 Suze: life estate in that house, which means you get to 462 00:26:27,560 --> 00:26:32,239 Suze: live in there, but upon that person's death, it gets 463 00:26:32,239 --> 00:26:37,229 Suze: divided according to where you want your assets to go. 464 00:26:37,660 --> 00:26:40,900 Suze: So number one, that's what I would be doing if 465 00:26:40,900 --> 00:26:44,660 Suze: I were you. In terms of what should you do 466 00:26:44,660 --> 00:26:45,859 Suze: with the rest of the money. 467 00:26:46,489 --> 00:26:50,310 Suze: I don't really know enough about you to really tell you. 468 00:26:50,560 --> 00:26:54,680 Suze: Obviously Alliant Credit Union CDs are a great place, as 469 00:26:54,680 --> 00:26:58,680 Suze: well as Treasury notes at this period of time, giving 470 00:26:58,680 --> 00:27:02,800 Suze: a nice interest rate. If you want growth, you might 471 00:27:02,800 --> 00:27:06,319 Suze: want to wait till Keith Fitzgerald comes out with his 472 00:27:06,319 --> 00:27:09,589 Suze: thing in a month or so or whenever it does. 473 00:27:09,760 --> 00:27:11,400 Suze: We're just all patiently waiting. 474 00:27:11,739 --> 00:27:15,540 Suze: But just go easy with that money and for now 475 00:27:15,540 --> 00:27:18,699 Suze: just leave it in like an account at either Schwab 476 00:27:18,699 --> 00:27:23,169 Suze: in their government money market account or something like that. 477 00:27:23,459 --> 00:27:25,810 Suze: All right, I hope that was clear. 478 00:27:25,979 --> 00:27:29,619 KT: OK, next question is from Sandra. I like this question, Suze. 479 00:27:30,020 --> 00:27:31,010 Suze: What you didn't like the others? 480 00:27:31,489 --> 00:27:33,639 KT: No, but I like this one because listen to this. We, 481 00:27:33,650 --> 00:27:38,050 KT: we experienced it ourselves. I'm 57 and I live in 482 00:27:38,050 --> 00:27:42,169 KT: a 52 year old condo in Miami. We have had 483 00:27:42,170 --> 00:27:46,010 KT: several assessments and another one coming up next month for 484 00:27:46,010 --> 00:27:46,329 KT: a total. 485 00:27:46,560 --> 00:27:52,979 KT: $42,000 in the last few years. I owe $69,000 on 486 00:27:52,979 --> 00:27:56,619 KT: my condo. We have many delinquent owners that live in 487 00:27:56,619 --> 00:27:59,589 KT: my building to the sum of half a million dollars. 488 00:27:59,859 --> 00:28:02,780 KT: I'm considering putting my condo up for sale. 489 00:28:03,099 --> 00:28:05,949 KT: But the realtor is advising me that I will have 490 00:28:05,949 --> 00:28:10,560 KT: to pay the assessment in full before the closing. Is 491 00:28:10,560 --> 00:28:14,400 KT: that true? I have 8 years before I retire. I'm 492 00:28:14,400 --> 00:28:17,319 KT: not sure what the right thing to do is sell 493 00:28:17,319 --> 00:28:20,040 KT: and go rent or just hold tight. I'm afraid the 494 00:28:20,040 --> 00:28:22,000 KT: assessments are not going to end. 495 00:28:22,239 --> 00:28:25,140 KT: And many unit owners will not be able to pay 496 00:28:25,390 --> 00:28:27,708 KT: their part. The rest of us will get stuck picking 497 00:28:27,709 --> 00:28:31,079 KT: that up too. I hope you can give me some guidance. 498 00:28:31,310 --> 00:28:34,149 Suze: You know, this is another funny one. I answered her 499 00:28:34,150 --> 00:28:38,459 Suze: directly because this is a really serious situation. It is, especially, 500 00:28:38,589 --> 00:28:42,589 Suze: and I laid it out. Do 1,2,3,4,5 things you need 501 00:28:42,589 --> 00:28:45,829 Suze: to know. And with that said, everybody, if you want 502 00:28:45,829 --> 00:28:47,030 Suze: and you have a question. 503 00:28:47,560 --> 00:28:52,400 Suze: Just write into ask Suze S U Z E podcast at gmail.com. 504 00:28:52,640 --> 00:28:56,150 Suze: If KT chooses it, it will be on the podcast, 505 00:28:56,359 --> 00:28:59,829 Suze: but I go through these questions every once in a while, 506 00:29:00,079 --> 00:29:03,319 Suze: and if I see one that catches my attention, that 507 00:29:03,319 --> 00:29:08,790 Suze: needs truly an answer right away, I answer it most 508 00:29:08,790 --> 00:29:11,640 Suze: of the time, not all the time, but most of 509 00:29:11,640 --> 00:29:14,280 Suze: the time. It just depends how many has come in. 510 00:29:14,829 --> 00:29:17,439 Suze: So this one was Sandra and the truth of the 511 00:29:17,439 --> 00:29:22,599 Suze: matter is just to summarize it. That these things that 512 00:29:22,599 --> 00:29:27,959 Suze: are happening, especially in condos in Miami, in Florida that 513 00:29:27,959 --> 00:29:31,030 Suze: are older than 20 years of age. 514 00:29:31,760 --> 00:29:37,079 Suze: They are getting assessments. They're deteriorating, and because of that 515 00:29:37,079 --> 00:29:41,199 Suze: collapse of that condo where many people were killed, now 516 00:29:41,199 --> 00:29:44,069 Suze: the Miami laws are making it so that you have 517 00:29:44,069 --> 00:29:47,420 Suze: to bring the condo up to date. And given that 518 00:29:47,420 --> 00:29:50,000 Suze: they've all let it go for so long, these assessments 519 00:29:50,000 --> 00:29:55,949 Suze: are not little. Some are $100,000 some are $200,000 or more. 520 00:29:56,260 --> 00:29:58,459 Suze: And a lot of people are just moving out. They 521 00:29:58,459 --> 00:30:01,199 Suze: don't care. They think they're just gonna absolutely walk away 522 00:30:01,199 --> 00:30:04,579 Suze: from it, which is why so many people are in 523 00:30:04,579 --> 00:30:09,750 Suze: arrears in the building. So first of all, Sandra's realtor 524 00:30:09,750 --> 00:30:11,739 Suze: is absolutely correct. 525 00:30:12,459 --> 00:30:16,280 Suze: If you were able to sell it, Sandra, you would 526 00:30:16,280 --> 00:30:21,390 Suze: have to pay the special assessment before closing. But the 527 00:30:21,390 --> 00:30:27,339 Suze: fact that this is happening, many buyers are very reluctant 528 00:30:27,339 --> 00:30:32,829 Suze: to buy something that has existing special assessments on it. Also, 529 00:30:32,910 --> 00:30:35,229 Suze: this is going to be a very difficult sell for 530 00:30:35,229 --> 00:30:38,670 Suze: you because you almost have to disclose to the new 531 00:30:38,670 --> 00:30:39,229 Suze: buyer 532 00:30:39,510 --> 00:30:41,939 Suze: that there are a high number of delinquent owners in 533 00:30:41,939 --> 00:30:46,579 Suze: your building, and when they realize that it can make 534 00:30:46,579 --> 00:30:51,589 Suze: your unit more difficult to sell and especially it could 535 00:30:51,589 --> 00:30:55,180 Suze: impact the sale price and I could go on and 536 00:30:55,180 --> 00:30:58,300 Suze: on and on given the age of your building, which 537 00:30:58,300 --> 00:31:00,689 Suze: is 52 years of age. 538 00:31:01,229 --> 00:31:03,939 Suze: It's more likely that you're gonna need a lot of 539 00:31:03,939 --> 00:31:09,619 Suze: assessments in the future and so it's very difficult what 540 00:31:09,619 --> 00:31:13,859 Suze: should you do. If you really want out then you're 541 00:31:13,859 --> 00:31:16,569 Suze: going to have to put in my opinion, a price 542 00:31:16,569 --> 00:31:17,979 Suze: on this condo, 543 00:31:18,780 --> 00:31:22,979 Suze: that somebody will go, I'll chance this. Oh, it's worth, 544 00:31:23,020 --> 00:31:26,900 Suze: let's just say it's worth 300,000, and she only wants... 545 00:31:26,900 --> 00:31:31,050 Suze: Sandra wants 150,000 for it, and she's paid for the assessment. 546 00:31:31,699 --> 00:31:34,780 Suze: I'll take it, but you're gonna have to make an 547 00:31:34,780 --> 00:31:39,780 Suze: offer that is so enticing to somebody. I can't even 548 00:31:39,780 --> 00:31:42,619 Suze: tell you otherwise chances are... 549 00:31:43,709 --> 00:31:47,949 Suze: you're gonna be stuck right there, right? And remember, continued 550 00:31:47,949 --> 00:31:52,349 Suze: assessments and a high delinquency rate is going to continue 551 00:31:52,349 --> 00:31:56,150 Suze: to negatively impact your property's value over time. 552 00:31:56,680 --> 00:32:00,410 Suze: So these are all the things you have to think about, 553 00:32:00,540 --> 00:32:04,819 Suze: but you should consult a financial adviser, you know, absolutely 554 00:32:04,819 --> 00:32:08,290 Suze: make sure you attend the HOA meetings to find out 555 00:32:08,290 --> 00:32:12,010 Suze: what do they have planned, how are they gonna help you, 556 00:32:12,260 --> 00:32:14,050 Suze: and consider also legal advice 557 00:32:14,224 --> 00:32:17,714 Suze: because maybe a condo lawyer can help you understand your 558 00:32:17,714 --> 00:32:22,944 Suze: rights and the association's options for dealing with delinquent owners 559 00:32:23,435 --> 00:32:26,755 Suze: and I can go on and on but that's approximately 560 00:32:26,755 --> 00:32:29,755 Suze: what you have to do. The reason that I liked 561 00:32:29,755 --> 00:32:31,714 Suze: that you picked this one KT. 562 00:32:32,270 --> 00:32:36,729 Suze: Is this isn't just affecting Sandra. It might affect us 563 00:32:36,729 --> 00:32:39,780 Suze: in the condo that we live in. Like we've been 564 00:32:39,780 --> 00:32:42,939 Suze: in there a number of years. It's going on 25 565 00:32:42,939 --> 00:32:46,260 Suze: years of age, and I've been told that work needs 566 00:32:46,260 --> 00:32:49,900 Suze: to be done on it. Now in our situation, thankfully 567 00:32:49,900 --> 00:32:52,219 Suze: nobody's in arrears and it's a wealthy 568 00:32:52,609 --> 00:32:56,770 Suze: enough building really that people have the money to pay 569 00:32:56,770 --> 00:33:01,209 Suze: the assessments, but don't just think that buying a condo 570 00:33:01,209 --> 00:33:06,040 Suze: in Florida is the key to making money in real estate. 571 00:33:06,209 --> 00:33:09,079 Suze: It may become your greatest nightmare yet. 572 00:33:09,369 --> 00:33:12,250 KT: All right, Suze, this next question for you is from Susannah. 573 00:33:13,619 --> 00:33:15,060 Suze: This is our last one, right? 574 00:33:15,140 --> 00:33:15,482 KT: Yea. 575 00:33:15,482 --> 00:33:17,780 Suze: And because I went so long and you already did 576 00:33:17,780 --> 00:33:20,619 Suze: your quizzy up front, we don't have a quizzy for you today. 577 00:33:20,900 --> 00:33:23,859 KT: OK, well this is a good one. Hello Suze and KT. 578 00:33:23,939 --> 00:33:28,979 KT: I'm 51, single, no kids. Is having my trust as 579 00:33:28,979 --> 00:33:33,500 KT: a beneficiary to my bank brokerage accounts instead of opening 580 00:33:33,500 --> 00:33:36,380 KT: new accounts under my trust name OK? 581 00:33:36,920 --> 00:33:41,000 KT: If having my trust as the primary beneficiary, do I 582 00:33:41,000 --> 00:33:42,500 KT: need a secondary 583 00:33:42,500 --> 00:33:43,479 KT: beneficiary? 584 00:33:43,530 --> 00:33:48,719 Suze: And the answer to that question, Susanna, is no, no, no. 585 00:33:49,119 --> 00:33:52,280 Suze: Go to the trouble of changing your accounts to the 586 00:33:52,280 --> 00:33:56,410 Suze: title of the trust. Why is that? Because, all right, 587 00:33:56,479 --> 00:34:00,680 Suze: if you die and your beneficiary happens to be the trust. 588 00:34:01,219 --> 00:34:04,609 Suze: No big deal. You avoided probate, so to speak. Maybe, 589 00:34:04,819 --> 00:34:09,889 Suze: maybe not, depends how you did everything. However, the problem is, 590 00:34:10,020 --> 00:34:13,060 Suze: what if you don't die and you're incapacitated. 591 00:34:13,449 --> 00:34:16,919 Suze: And now it's just in your name with the beneficiary 592 00:34:16,919 --> 00:34:20,270 Suze: being your trust. Remember, one of the goals of having 593 00:34:20,479 --> 00:34:24,149 Suze: a living trust is that in case of an incapacity, 594 00:34:24,360 --> 00:34:27,719 Suze: your successor trustee can step in and pay your bills, 595 00:34:27,800 --> 00:34:30,560 Suze: do all kinds of things for you. So no, it 596 00:34:30,560 --> 00:34:35,629 Suze: is not OK to have the beneficiary just be the trust. 597 00:34:35,760 --> 00:34:39,030 Suze: You are to open it up in your trust name, 598 00:34:39,159 --> 00:34:40,239 Suze: change the title. 599 00:34:40,780 --> 00:34:42,729 Suze: Right, KT, what do you think? 600 00:34:43,020 --> 00:34:43,699 KT: Boxing Day. 601 00:34:43,699 --> 00:34:44,879 Suze: Boxing Day. 602 00:34:45,340 --> 00:34:46,459 Suze: What what's in my box today? 603 00:34:46,459 --> 00:34:49,620 KT: Let's go, let's have some goodies in the box. 604 00:34:49,620 --> 00:34:51,250 Suze: No, what's in the box? 605 00:34:51,870 --> 00:34:53,020 KT: What's our leftovers? 606 00:34:53,100 --> 00:34:54,570 Suze: What's my leftovers? 607 00:34:54,780 --> 00:34:57,580 KT: Well, we have, we have a lot of leftovers. 608 00:34:58,199 --> 00:35:01,010 Suze: Well surprise me.. but here's the thing, everybody, 609 00:35:01,260 --> 00:35:02,419 KT: No sweets for you. 610 00:35:02,500 --> 00:35:08,969 Suze: But before we go on, today is December 26th, and yesterday, 611 00:35:09,219 --> 00:35:10,850 Suze: December 25th 612 00:35:11,510 --> 00:35:15,760 Suze: was Jimmy Buffett's seventy-eighth birthday. 613 00:35:16,389 --> 00:35:19,100 KT: Yeah, Jimmy, we miss you. We miss you so much. 614 00:35:19,229 --> 00:35:24,629 Suze: So, so much. I can't even tell you. And we've 615 00:35:24,629 --> 00:35:29,989 Suze: been playing Mele Kalikimaka, all your songs. We played it all 616 00:35:29,989 --> 00:35:32,870 Suze: day yesterday for your birthday. 617 00:35:33,320 --> 00:35:37,489 Suze: But wherever you are, my dear Jimmy, please know that 618 00:35:37,489 --> 00:35:41,069 Suze: these two little mermaids of yours miss you so very, 619 00:35:41,330 --> 00:35:42,279 Suze: very much. 620 00:35:43,250 --> 00:35:48,620 KT: So, so Suze, we still have one more podcast in 2024. 621 00:35:48,969 --> 00:35:51,330 KT: That's Sunday. Maybe I'm going to come on with you. 622 00:35:51,570 --> 00:35:53,139 Suze: Maybe I'm going to take the day off. 623 00:35:53,449 --> 00:35:54,209 KT: No, maybe I'll do it with you. 624 00:35:55,090 --> 00:35:56,449 Suze: Maybe I'm gonna take the day off. 625 00:35:57,810 --> 00:35:58,649 KT: Don't take the day off 626 00:35:58,649 --> 00:36:00,449 Suze: Maybe we need to give Robert a day off. 627 00:36:00,449 --> 00:36:02,449 KT: No, we need a year end. 628 00:36:02,899 --> 00:36:03,850 Suze: Oh, we do? 629 00:36:03,850 --> 00:36:06,919 KT: We need a year end. We need a summary. We, Robert, 630 00:36:07,090 --> 00:36:08,979 KT: why don't you do our year-end funny? 631 00:36:10,229 --> 00:36:11,408 Suze: Yea Robert, what's wrong with you? 632 00:36:11,649 --> 00:36:16,799 KT: Let Robert do a year-end Sunday Suze School that isn't 633 00:36:16,800 --> 00:36:20,129 KT: a school at all. It's Sunday fun with Suze a 634 00:36:20,129 --> 00:36:20,689 KT: year end. 635 00:36:21,209 --> 00:36:24,198 Suze: Well, let's see what he can do, all right, but 636 00:36:24,199 --> 00:36:29,638 Suze: until either then or next year or whatever, we always 637 00:36:29,639 --> 00:36:31,840 Suze: wish you a very happy new year. We'll do it 638 00:36:31,840 --> 00:36:34,969 Suze: again in just a few more days, but just in case, 639 00:36:35,229 --> 00:36:40,000 Suze: happy new year. We love you all very much and KT... 640 00:36:41,149 --> 00:36:42,550 Suze: Do you want to announce anything? 641 00:36:43,129 --> 00:36:45,850 KT: Well, it's not an announcement. We owe a big thank 642 00:36:45,850 --> 00:36:48,819 KT: you at this year end to our friend SIA. 643 00:36:49,610 --> 00:36:54,729 KT: Who's made us all so happy and made us what Suze? 644 00:36:54,729 --> 00:36:56,759 Suze and KT: Unstoppable!