1 00:00:41,209 --> 00:00:47,229 Suze: May 5th 2024. Welcome everybody to the Women and Money podcast. 2 00:00:47,439 --> 00:00:52,958 Suze: As well as everybody smart enough to listen today is 3 00:00:52,970 --> 00:00:56,900 Suze: Suze School. Take out your Suze notebooks because you are 4 00:00:56,909 --> 00:01:01,470 Suze: going to need them for today's Suze School, which is 5 00:01:01,479 --> 00:01:06,160 Suze: about real estate just so, you know. However, I just 6 00:01:06,169 --> 00:01:07,959 Suze: want to say something to all of you. 7 00:01:09,129 --> 00:01:13,750 Suze: The date that I record something or the date that 8 00:01:13,760 --> 00:01:17,029 Suze: I say, hey, I like this stock, maybe you should 9 00:01:17,040 --> 00:01:18,349 Suze: think about buying it 10 00:01:19,110 --> 00:01:24,369 Suze: is the date that is very important because if you 11 00:01:24,379 --> 00:01:28,369 Suze: are listening to something even a week or four weeks 12 00:01:28,379 --> 00:01:31,610 Suze: or four months after I have said it 13 00:01:32,550 --> 00:01:35,830 Suze: a lot of times the stock has already moved, could 14 00:01:35,839 --> 00:01:39,690 Suze: move down, could move up, but it has moved. And 15 00:01:39,699 --> 00:01:43,800 Suze: I also want to say that it's important that all 16 00:01:43,809 --> 00:01:47,870 Suze: of you truthfully sign up for the Women and Money 17 00:01:47,879 --> 00:01:48,330 Suze: app 18 00:01:49,080 --> 00:01:53,099 Suze: and that's on Google Play or Apple Apps doesn't cost 19 00:01:53,110 --> 00:01:57,860 Suze: you a penny. But on that app I will say 20 00:01:57,870 --> 00:02:01,540 Suze: things when I want you to know them right away 21 00:02:01,959 --> 00:02:06,319 Suze: versus waiting until a Thursday or a Sunday when we 22 00:02:06,330 --> 00:02:10,619 Suze: create new podcasts. And that's when they drop for you 23 00:02:10,630 --> 00:02:14,410 Suze: to hear what maybe I want to say. If ever 24 00:02:14,419 --> 00:02:16,130 Suze: I recommend something, 25 00:02:16,830 --> 00:02:20,509 Suze: an ETF whatever it is, listen to the date, I'm 26 00:02:20,520 --> 00:02:24,339 Suze: recommending it. Look at what it then is trading at 27 00:02:24,350 --> 00:02:28,169 Suze: when you are listening to it and make a decision 28 00:02:28,179 --> 00:02:32,410 Suze: from there. Because ultimately, you are the one who has 29 00:02:32,419 --> 00:02:34,970 Suze: to decide should you buy, should you sell. Do you 30 00:02:34,979 --> 00:02:37,580 Suze: like it? Should you buy more? Should you dollar cost 31 00:02:37,589 --> 00:02:41,758 Suze: average into it? You have to make that decision. And 32 00:02:41,770 --> 00:02:45,089 Suze: number two, can you just download the Women and Money 33 00:02:45,100 --> 00:02:46,329 Suze: community app 34 00:02:46,669 --> 00:02:50,050 Suze: so that if something happens and I want to say 35 00:02:50,059 --> 00:02:54,570 Suze: something to you, you'll know about it before it is said, 36 00:02:54,580 --> 00:02:57,919 Suze: if it's said at all on the podcast. 37 00:02:59,288 --> 00:03:03,539 Suze: I want to talk about my Alliant.com 38 00:03:04,320 --> 00:03:07,619 Suze: As you may know. I have been asking all of 39 00:03:07,630 --> 00:03:13,160 Suze: you to go to myalliant.com. That is the actual URL 40 00:03:13,169 --> 00:03:16,660 Suze: that you have got to use everybody where you will 41 00:03:16,669 --> 00:03:18,500 Suze: go there and find 42 00:03:19,020 --> 00:03:24,960 Suze: the Stay Smart Quiz for 2024 that is comprised of 43 00:03:24,970 --> 00:03:28,979 Suze: just five questions. It wouldn't kill you to just take 44 00:03:28,990 --> 00:03:32,720 Suze: that quiz and see, are you smart when it comes 45 00:03:32,729 --> 00:03:36,199 Suze: to certain aspects of your money? And if you answer 46 00:03:36,210 --> 00:03:40,259 Suze: the question wrong, it tells you what you should do 47 00:03:40,270 --> 00:03:43,309 Suze: so simple, will take you 10 minutes at most 48 00:03:43,970 --> 00:03:48,690 Suze: after you have answered those questions. However, it will ask 49 00:03:48,699 --> 00:03:52,279 Suze: you for your email address. If you want a summary 50 00:03:52,289 --> 00:03:55,389 Suze: of the questions that you just answered. 51 00:03:56,169 --> 00:04:01,699 Suze: That's great. You have one more month between today and 52 00:04:01,710 --> 00:04:05,509 Suze: June 5th to do that. Enter your email. You don't 53 00:04:05,520 --> 00:04:07,729 Suze: have to buy anything. You don't have to sign up 54 00:04:07,740 --> 00:04:12,270 Suze: for an account, no strings attached. And at the end 55 00:04:12,279 --> 00:04:16,790 Suze: of this, in one month, one of your emails will 56 00:04:16,799 --> 00:04:23,049 Suze: be pulled and that person will win $5000. So if 57 00:04:23,059 --> 00:04:23,910 Suze: I were you, 58 00:04:24,380 --> 00:04:26,940 Suze: I would do that. I would tell my friends to 59 00:04:26,950 --> 00:04:29,980 Suze: do that. I would tell my enemies to do that. 60 00:04:30,059 --> 00:04:32,799 Suze: I would tell everybody to do that 61 00:04:33,420 --> 00:04:36,630 Suze: so that they had a chance to not only learn 62 00:04:36,640 --> 00:04:41,880 Suze: about their money but to possibly win some as well. Again, 63 00:04:41,890 --> 00:04:50,920 Suze: go to myalliant.com. Officially everything goes live tomorrow May 6th. 64 00:04:51,079 --> 00:04:53,630 Suze: But I'm just giving you a heads up 65 00:04:54,100 --> 00:04:56,910 Suze: on what you need to know and why you should 66 00:04:56,920 --> 00:05:00,089 Suze: be doing it. And if you've already taken it, put 67 00:05:00,100 --> 00:05:04,510 Suze: your email in, you will automatically qualify to be entered. 68 00:05:04,519 --> 00:05:10,320 Suze: All right, everybody. Now let's go to Suze school. 69 00:05:11,829 --> 00:05:17,359 Suze: Many of you are writing in and you want to 70 00:05:17,369 --> 00:05:21,738 Suze: buy real estate. But yet you don't know if real 71 00:05:21,750 --> 00:05:26,988 Suze: estate has hit its top interest rates have gone up again. 7% 72 00:05:27,000 --> 00:05:30,649 Suze: or so. And now you are afraid to buy 73 00:05:30,920 --> 00:05:34,660 Suze: real estate, even if you have the money to buy 74 00:05:34,670 --> 00:05:39,690 Suze: real estate. Because somewhere you are wishing and hoping that 75 00:05:39,700 --> 00:05:45,200 Suze: possibly real estate will go back down like it did 76 00:05:45,209 --> 00:05:52,678 Suze: in 2006. Remember about four or five of the worst 77 00:05:52,690 --> 00:05:55,219 Suze: years ever in real estate 78 00:05:55,869 --> 00:06:03,940 Suze: were from approximately 2006 to 2010 and 2011. And you know, 79 00:06:03,950 --> 00:06:10,488 Suze: out of the past 81 years, real estate, according to 80 00:06:10,500 --> 00:06:12,579 Suze: a Case Schiller study, 81 00:06:13,459 --> 00:06:19,769 Suze: real estate went up 76 of those years and only 82 00:06:19,779 --> 00:06:24,040 Suze: went down five or six of those years. 83 00:06:24,839 --> 00:06:31,540 Suze: The majority of that time between 2006 and 2010 or 2011. 84 00:06:32,309 --> 00:06:36,700 Suze: So you just need to know that, ok, but you 85 00:06:36,709 --> 00:06:39,529 Suze: are afraid, you're afraid that this is the top of 86 00:06:39,540 --> 00:06:43,089 Suze: the market. How much higher can it go? So even 87 00:06:43,100 --> 00:06:46,769 Suze: if you had the money to buy real estate or 88 00:06:46,779 --> 00:06:47,609 Suze: have it, 89 00:06:49,049 --> 00:06:53,750 Suze: you are afraid to do so. So I just wanna 90 00:06:53,760 --> 00:06:58,829 Suze: give you right now a little education, a Suze School on 91 00:06:58,839 --> 00:07:02,510 Suze: the difference between real estate today 92 00:07:03,450 --> 00:07:10,549 Suze: and real estate back in 2006, 2007, 2008, 2009, 2010. 93 00:07:11,470 --> 00:07:18,850 Suze: Big difference. Everybody. So the main law of money of 94 00:07:18,859 --> 00:07:21,049 Suze: what makes real estate go up 95 00:07:21,720 --> 00:07:27,980 Suze: is supply, how many houses pieces of real estate are 96 00:07:27,989 --> 00:07:35,100 Suze: available versus the demand. How many people want real estate 97 00:07:35,429 --> 00:07:40,209 Suze: when there is more demand than supply real estate prices 98 00:07:40,220 --> 00:07:46,100 Suze: go up when there is more supply than demand. Real 99 00:07:46,109 --> 00:07:49,579 Suze: estate prices tend to go down. 100 00:07:50,299 --> 00:07:54,679 Suze: Are you writing that down? Everybody? Because that is important 101 00:07:54,690 --> 00:07:59,350 Suze: for you to remember as I go through this Suze School. 102 00:08:00,359 --> 00:08:02,829 Suze: In 2006, 103 00:08:03,790 --> 00:08:08,578 Suze: we had a population in the United States of approximately 104 00:08:08,589 --> 00:08:13,570 Suze: 300 million people. And at that time, 105 00:08:14,709 --> 00:08:21,269 Suze: there were 4.1 million homes that were for sale. 106 00:08:22,459 --> 00:08:23,309 Suze: Today, 107 00:08:24,220 --> 00:08:28,149 Suze: right now, as you are hearing me on May 5th, 108 00:08:29,200 --> 00:08:36,820 Suze: there are 340 million people in terms of a population today, 109 00:08:37,510 --> 00:08:41,809 Suze: but there's only 1.1 million homes 110 00:08:42,559 --> 00:08:44,849 Suze: on the market today. 111 00:08:45,700 --> 00:08:50,919 Suze: So we have gone up 40 million people, 112 00:08:51,890 --> 00:08:57,150 Suze: but there are 3 million fewer homes, number one, 113 00:08:58,190 --> 00:09:04,159 Suze: Number two, of that 1.1 million homes, 114 00:09:05,030 --> 00:09:12,369 Suze: approximately 450,000 of them are already in contract. 115 00:09:13,190 --> 00:09:16,289 Suze: So therefore, they're really not on the market to be 116 00:09:16,299 --> 00:09:21,419 Suze: sold just because they haven't closed yet. They're included in 117 00:09:21,429 --> 00:09:25,250 Suze: the supply of 1.1 million, but they really have been 118 00:09:25,260 --> 00:09:34,500 Suze: spoken for. So truthfully, there are only 650,000 homes. Approximately 119 00:09:34,510 --> 00:09:36,400 Suze: in inventory 120 00:09:37,469 --> 00:09:43,590 Suze: demand has gone up, supply has gone down tremendously. And 121 00:09:43,599 --> 00:09:50,130 Suze: that number of 650,000 in inventory is half of the 122 00:09:50,140 --> 00:09:56,569 Suze: supply from the pre pandemic level. So before the pandemic 123 00:09:56,580 --> 00:09:57,559 Suze: ever hit, 124 00:09:58,599 --> 00:10:04,659 Suze: there was approximately 1.3 million homes in supply for everybody 125 00:10:05,669 --> 00:10:12,569 Suze: today. There is half that amount that is a big deal. 126 00:10:13,530 --> 00:10:15,789 Suze: The other thing you need to know 127 00:10:16,479 --> 00:10:20,260 Suze: is that, yes, I get that interest rates are really 128 00:10:20,270 --> 00:10:21,419 Suze: high right now, 129 00:10:22,309 --> 00:10:27,960 Suze: but eventually interest rates have got to come down. I 130 00:10:27,969 --> 00:10:31,330 Suze: don't know when that will be, but it just has 131 00:10:31,340 --> 00:10:35,190 Suze: to happen now. Is it possible that they could go 132 00:10:35,200 --> 00:10:40,690 Suze: up before they come down? Yeah, it's possible. What would 133 00:10:40,700 --> 00:10:44,330 Suze: I be looking at if I were you as a 134 00:10:44,340 --> 00:10:46,650 Suze: little bit of a danger point? 135 00:10:47,169 --> 00:10:51,059 Suze: I would be looking at what the 10 year Treasury 136 00:10:51,070 --> 00:10:56,789 Suze: note is doing because when the 10 year treasury note 137 00:10:57,190 --> 00:11:04,229 Suze: happens to hit 5% maybe it goes above 5%. Who knows? 138 00:11:04,460 --> 00:11:05,989 Suze: But when it does that 139 00:11:06,690 --> 00:11:09,479 Suze: then a lot of people will come out of the 140 00:11:09,489 --> 00:11:12,419 Suze: stock market, most likely you'll see the stock market go 141 00:11:12,429 --> 00:11:12,988 Suze: down 142 00:11:13,710 --> 00:11:18,859 Suze: because people will absolutely feel like the risk is off 143 00:11:18,869 --> 00:11:22,450 Suze: and they wanna be secure. So why not lock in 144 00:11:22,479 --> 00:11:26,840 Suze: a 10 year treasury at 5%? Currently, the 10 year 145 00:11:26,849 --> 00:11:30,890 Suze: treasury is at about 4.5%. 146 00:11:32,479 --> 00:11:34,968 Suze: You just should look at that because that's maybe an 147 00:11:34,979 --> 00:11:38,319 Suze: indicator that things are not going the way that we 148 00:11:38,330 --> 00:11:40,289 Suze: would all like them to go 149 00:11:41,239 --> 00:11:44,569 Suze: if interest rates start to come down. 150 00:11:45,229 --> 00:11:51,409 Suze: The National Association of Realtors have said for every 1% 151 00:11:51,419 --> 00:11:53,809 Suze: drop in real estate, 152 00:11:54,679 --> 00:11:59,880 Suze: 5 million more people will become qualified to buy 153 00:12:00,650 --> 00:12:08,840 Suze: when rates come down. Home prices should absolutely increase as well. 154 00:12:08,869 --> 00:12:16,250 Suze: Last but not least in 2006 in those years, delinquencies 155 00:12:16,260 --> 00:12:20,909 Suze: on mortgages to qualify for a mortgage. Back then, 156 00:12:21,390 --> 00:12:23,880 Suze: you didn't have to have any income. You didn't have 157 00:12:23,890 --> 00:12:26,479 Suze: to have any assets. I don't even think you needed 158 00:12:26,489 --> 00:12:30,869 Suze: a social security number. Just joking, but anybody could have 159 00:12:30,880 --> 00:12:33,530 Suze: qualified for a mortgage. 160 00:12:34,469 --> 00:12:39,130 Suze: There were absolutely no restrictions on them whatsoever. 161 00:12:39,919 --> 00:12:43,940 Suze: So what happened as things started to come down, the 162 00:12:43,950 --> 00:12:49,190 Suze: delinquency rate on mortgages were anywhere during those years, from 163 00:12:49,200 --> 00:12:52,940 Suze: 12 to 25%. 164 00:12:53,969 --> 00:12:59,718 Suze: And real estate prices crashed during that period of time, 165 00:12:59,729 --> 00:13:01,580 Suze: absolutely crashed. 166 00:13:01,909 --> 00:13:05,890 Suze: And mainly they crashed because people were losing their jobs, 167 00:13:05,900 --> 00:13:08,989 Suze: they couldn't afford to pay their mortgages. Then they had 168 00:13:09,000 --> 00:13:12,609 Suze: to go into foreclosure. If the neighbor that you had 169 00:13:12,619 --> 00:13:16,809 Suze: went into foreclosure, that then brought your value of your 170 00:13:16,820 --> 00:13:19,690 Suze: home all the way down as well and then you 171 00:13:19,700 --> 00:13:24,719 Suze: became underwater and everything just really went to pot. 172 00:13:25,599 --> 00:13:29,858 Suze: Today to qualify for a mortgage, it is a whole 173 00:13:29,919 --> 00:13:33,700 Suze: other story. They have gotten as strict as they have 174 00:13:33,710 --> 00:13:36,978 Suze: ever been. They wanna know that you have the money 175 00:13:36,989 --> 00:13:39,400 Suze: to do so you have the FICO score to do 176 00:13:39,409 --> 00:13:43,340 Suze: so you're the perfect candidate. They are not taking chances 177 00:13:43,349 --> 00:13:46,539 Suze: anymore on anyone. And therefore 178 00:13:47,140 --> 00:13:56,650 Suze: in 2024 delinquencies on mortgages are approximately only 2.8% versus 179 00:13:56,659 --> 00:14:00,580 Suze: the 12 to 25% back in 2006. And during those 180 00:14:00,590 --> 00:14:07,450 Suze: years credit card debt today is even higher than mortgage 181 00:14:07,460 --> 00:14:11,809 Suze: delinquencies at about 3.5%. 182 00:14:12,700 --> 00:14:14,760 Suze: But auto loans 183 00:14:15,580 --> 00:14:21,739 Suze: are the highest of all delinquencies at 7.7%. What does 184 00:14:21,750 --> 00:14:26,729 Suze: that tell me that tells me with the repossessions and 185 00:14:26,739 --> 00:14:30,679 Suze: the delinquencies that you're apt to get a better deal 186 00:14:30,690 --> 00:14:32,109 Suze: on a car 187 00:14:32,789 --> 00:14:39,010 Suze: than a year or two ago. Delinquencies on homes on 188 00:14:39,020 --> 00:14:44,119 Suze: credit cards on all of those things tell you what's happening. 189 00:14:44,840 --> 00:14:51,500 Suze: Therefore, given that delinquencies on homes are lower than cars 190 00:14:51,510 --> 00:14:57,710 Suze: and credit cards. Given that our population has increased from 191 00:14:57,719 --> 00:15:04,760 Suze: 2006 till today by 40 million people. Given that we 192 00:15:04,780 --> 00:15:09,950 Suze: have half the supply from the pre pandemic level in 193 00:15:09,960 --> 00:15:11,489 Suze: terms of homes 194 00:15:11,869 --> 00:15:18,099 Suze: with only 650,000 homes in inventory and tremendous demand. 195 00:15:18,750 --> 00:15:22,969 Suze: It would seem to me that real estate prices are 196 00:15:22,979 --> 00:15:25,969 Suze: still going to go up. Now, are they going to 197 00:15:25,979 --> 00:15:29,820 Suze: go up as fast as they did in 2021 when 198 00:15:29,830 --> 00:15:34,489 Suze: they went up? Approximately 17% according to the National Association 199 00:15:34,500 --> 00:15:38,080 Suze: of Realtors, of course, depending on where you lived. Some, 200 00:15:38,090 --> 00:15:40,400 Suze: not so much, some even went up more 201 00:15:40,789 --> 00:15:47,770 Suze: about 7% in 2022 about 3% in 2023. Will they 202 00:15:47,780 --> 00:15:51,809 Suze: continue to go up like that? Probably, I won't be 203 00:15:51,820 --> 00:15:56,900 Suze: surprised to see them go up about 3%. Maybe 4%. 204 00:15:56,909 --> 00:15:59,880 Suze: Do I expect them to go up per year again? 205 00:15:59,890 --> 00:16:01,760 Suze: At 7%? I don't 206 00:16:02,590 --> 00:16:07,969 Suze: but when real estate even goes up three or 4% 207 00:16:08,000 --> 00:16:12,179 Suze: let's just say you bought a home for $100,000 and 208 00:16:12,190 --> 00:16:13,369 Suze: don't you wish? 209 00:16:14,080 --> 00:16:17,700 Suze: But this will work whether it's $100,000 or a million 210 00:16:17,710 --> 00:16:19,809 Suze: dollars or whatever it is you want 211 00:16:20,700 --> 00:16:26,039 Suze: and you were smart and you put down 20%. Remember however, 212 00:16:26,049 --> 00:16:28,440 Suze: you don't have to put down 20%. 213 00:16:29,099 --> 00:16:32,849 Suze: You want to put down 20% because then you avoid 214 00:16:32,859 --> 00:16:36,239 Suze: certain types of insurance and things like that and possibly 215 00:16:36,250 --> 00:16:39,340 Suze: a higher interest rate, but you can buy a home 216 00:16:39,349 --> 00:16:44,320 Suze: for 10% down, 5% down in some cases, 3% down, 217 00:16:44,489 --> 00:16:47,520 Suze: just make sure you have a great FICO score and 218 00:16:47,530 --> 00:16:49,320 Suze: the money behind you. All right, 219 00:16:49,969 --> 00:16:52,030 Suze: you decide that you're going to be smart and you 220 00:16:52,039 --> 00:17:01,390 Suze: put down $20,000. 20 percent and now that house goes up 3%. 221 00:17:02,440 --> 00:17:05,650 Suze: So now it's worth $130,000 222 00:17:06,338 --> 00:17:11,187 Suze: but you didn't buy it for $100,000 with $100,000 in cash. 223 00:17:11,708 --> 00:17:20,388 Suze: You bought it for $20,000 and $3000 increase on $20,000 224 00:17:20,398 --> 00:17:23,228 Suze: is 15%. 225 00:17:24,260 --> 00:17:28,589 Suze: So you actually, when you don't buy a house for cash, 226 00:17:29,479 --> 00:17:35,180 Suze: possibly could make more money on it depending how much 227 00:17:35,189 --> 00:17:36,900 Suze: it goes up in a year. 228 00:17:37,709 --> 00:17:40,689 Suze: But that's leveraging your money. 229 00:17:41,479 --> 00:17:45,369 Suze: I will always tell you, I don't care where you 230 00:17:45,380 --> 00:17:47,020 Suze: are and who you are 231 00:17:47,780 --> 00:17:53,640 Suze: really, really wealthy. People buy homes. For cash. They very 232 00:17:53,650 --> 00:18:00,020 Suze: seldom use leverage, especially when interest rates are as high 233 00:18:00,030 --> 00:18:03,199 Suze: as they are right now. It was another thing when 234 00:18:03,209 --> 00:18:07,630 Suze: interest rates were at 2% 2.5%. But when interest rates 235 00:18:07,640 --> 00:18:08,829 Suze: are this high, 236 00:18:10,160 --> 00:18:13,270 Suze: you are far better off if you can just buy 237 00:18:13,280 --> 00:18:17,060 Suze: it for cash, but not many people can do that. 238 00:18:17,310 --> 00:18:21,099 Suze: But I just wanted to use that example that even 239 00:18:21,109 --> 00:18:25,329 Suze: if homes only go up 3 to 5% a year 240 00:18:26,359 --> 00:18:32,329 Suze: depending on your situation. That is a great deal. One 241 00:18:32,339 --> 00:18:35,300 Suze: more point, many of you 242 00:18:36,020 --> 00:18:40,369 Suze: are writing me and you're saying, Suze, I bought a 243 00:18:40,380 --> 00:18:47,280 Suze: home years ago and now I have tremendous equity in 244 00:18:47,290 --> 00:18:52,839 Suze: my home and I want to downsize and I have 245 00:18:52,849 --> 00:18:57,390 Suze: enough money to downsize and buy something outright by the 246 00:18:57,400 --> 00:19:00,560 Suze: equity in my home. Do you think that's a good idea? 247 00:19:01,099 --> 00:19:03,790 Suze: And I always write them back and even in 248 00:19:04,069 --> 00:19:07,420 Suze: the Ultimate Retirement Guide for 50 Plus, that I wrote 249 00:19:07,430 --> 00:19:12,810 Suze: in 2019, which is being updated as we speak right now, 250 00:19:13,760 --> 00:19:16,459 Suze: it's like, of course, you should, if you want to 251 00:19:16,469 --> 00:19:20,479 Suze: downsize and you have enough equity in your home to 252 00:19:20,489 --> 00:19:23,540 Suze: buy it outright, so you don't have a mortgage, who 253 00:19:23,550 --> 00:19:26,988 Suze: cares what interest rates are right now? Because you're going 254 00:19:27,000 --> 00:19:31,750 Suze: to be buying it for cash done. But many of 255 00:19:31,760 --> 00:19:34,489 Suze: you are saying to me, Suze, 256 00:19:35,219 --> 00:19:41,489 Suze: back in 2021 we decided to buy a home for 257 00:19:41,500 --> 00:19:42,520 Suze: the first time 258 00:19:43,349 --> 00:19:46,540 Suze: and we got it at a two and three quarters 259 00:19:46,550 --> 00:19:52,139 Suze: percent interest rate for 30 years. And now we're thinking 260 00:19:52,439 --> 00:19:56,079 Suze: we need to move, we need to move to a 261 00:19:56,089 --> 00:20:00,739 Suze: tax free state or a smaller home. We just need 262 00:20:00,750 --> 00:20:05,770 Suze: to downsize because of inflation. We're having trouble meeting our 263 00:20:05,780 --> 00:20:10,688 Suze: property taxes, our insurance, all of that. But Suze, 264 00:20:11,010 --> 00:20:16,479 Suze: we can't afford to downsize and give up a two 265 00:20:16,489 --> 00:20:21,280 Suze: and three quarter percent interest rate when interest rates right 266 00:20:21,290 --> 00:20:25,550 Suze: now are approximately seven per cent. 267 00:20:26,410 --> 00:20:29,020 Suze: I want you to listen to me closely and I 268 00:20:29,030 --> 00:20:33,719 Suze: know this is important for you to understand. You need 269 00:20:33,729 --> 00:20:38,849 Suze: to do the numbers in every situation to see if 270 00:20:38,859 --> 00:20:43,859 Suze: it in fact makes sense for you to downsize even 271 00:20:43,979 --> 00:20:49,030 Suze: when the interest rates are at 7% for a mortgage. 272 00:20:49,630 --> 00:20:54,089 Suze: So you bought a home in 2021 let's just say, 273 00:20:54,099 --> 00:21:00,829 Suze: for $380,000 you put $76,000 down. 274 00:21:01,739 --> 00:21:08,359 Suze: And after everything said and done, you have a $304,000 275 00:21:08,369 --> 00:21:13,040 Suze: mortgage at two and three quarters percent for 30 years. 276 00:21:13,050 --> 00:21:14,479 Suze: Are you writing this down 277 00:21:15,270 --> 00:21:18,290 Suze: And your mortgage payment alone? And we're only going to 278 00:21:18,300 --> 00:21:25,209 Suze: deal with mortgages right now happens to be $1241 a month. 279 00:21:25,829 --> 00:21:29,260 Suze: And here you now are a little bit over three 280 00:21:29,270 --> 00:21:30,170 Suze: years later 281 00:21:30,900 --> 00:21:39,599 Suze: and you still owe $283,000 on this mortgage. 282 00:21:40,829 --> 00:21:46,139 Suze: However, you have a $383,000 home that you bought three 283 00:21:46,150 --> 00:21:46,890 Suze: years ago 284 00:21:47,569 --> 00:21:49,709 Suze: and whether you know it or not, 285 00:21:50,369 --> 00:21:53,589 Suze: that home has increased in value 286 00:21:54,630 --> 00:21:57,688 Suze: and those homes have gone up. And I mentioned how 287 00:21:57,699 --> 00:22:00,010 Suze: much they would have gone up according to the National 288 00:22:00,020 --> 00:22:05,089 Suze: Association of Realtors earlier in the podcast, but that house 289 00:22:05,099 --> 00:22:08,089 Suze: would be worth approximately two day, 290 00:22:08,800 --> 00:22:13,500 Suze: about 490 to $500,000. 291 00:22:14,160 --> 00:22:15,839 Suze: And let's just say 292 00:22:16,640 --> 00:22:19,859 Suze: that you took that home, you put it on the market, 293 00:22:19,869 --> 00:22:28,010 Suze: somebody bought it and you owe $283,000 on that home. 294 00:22:28,510 --> 00:22:33,479 Suze: So after real estate commissions and everything, maybe you got 295 00:22:33,489 --> 00:22:36,619 Suze: a great deal on them or whatever, let's just say 296 00:22:37,010 --> 00:22:43,540 Suze: you walk away with $195,000 ok? 297 00:22:44,349 --> 00:22:48,890 Suze: And by the way, you do not owe any tax 298 00:22:48,900 --> 00:22:52,729 Suze: on that sale since you lived in that home as 299 00:22:52,739 --> 00:22:57,329 Suze: your primary residency for two out of the past five years, 300 00:22:57,339 --> 00:23:02,930 Suze: which means that $250,000 of a gain is tax free 301 00:23:02,939 --> 00:23:07,609 Suze: or double that to 500,000. If you owned it with 302 00:23:07,619 --> 00:23:11,560 Suze: another person who lived there with you as well, 303 00:23:13,010 --> 00:23:17,250 Suze: now you move to a different state that maybe isn't 304 00:23:17,260 --> 00:23:22,188 Suze: as expensive. You move to another state that has no 305 00:23:22,199 --> 00:23:26,510 Suze: state income taxes to it. You are trying to save 306 00:23:26,520 --> 00:23:28,540 Suze: as much money as possible 307 00:23:29,270 --> 00:23:34,599 Suze: and you find something for $380,000 308 00:23:35,329 --> 00:23:40,429 Suze: and you put $195,000 down. 309 00:23:41,510 --> 00:23:47,250 Suze: And now you have $185,000 - 30 year mortgage 310 00:23:48,569 --> 00:23:55,599 Suze: at 7%. Your monthly payments are going to be $1230 311 00:23:55,609 --> 00:23:56,250 Suze: a month, 312 00:23:57,040 --> 00:24:01,819 Suze: which is literally almost $10 a month less than what 313 00:24:01,829 --> 00:24:04,869 Suze: you were paying to stay where you are. 314 00:24:05,839 --> 00:24:11,010 Suze: Not only that, your property taxes may be less given 315 00:24:11,020 --> 00:24:15,569 Suze: where you're living, your insurance costs may be less. 316 00:24:17,000 --> 00:24:22,540 Suze: Your utilities probably will be less. Your maintenance will be less. 317 00:24:23,630 --> 00:24:28,489 Suze: So you are saving money, but it's still costing you 318 00:24:28,890 --> 00:24:32,680 Suze: the same amount of month, at least in your mortgage. 319 00:24:33,199 --> 00:24:35,010 Suze: All right, but let's not stop there. 320 00:24:35,780 --> 00:24:39,520 Suze: Let's also say three years from now, 321 00:24:40,229 --> 00:24:45,849 Suze: mortgage rates have gone down to 5% and you really 322 00:24:45,859 --> 00:24:48,550 Suze: love where you moved, you like it there and you 323 00:24:48,560 --> 00:24:54,900 Suze: want to stay there. So you decide to refinance three 324 00:24:54,910 --> 00:24:56,129 Suze: years from now, 325 00:24:57,000 --> 00:25:05,420 Suze: you will only owe $179,000 on your original, $185,000 mortgage. 326 00:25:06,430 --> 00:25:10,569 Suze: If you refinance that for just 20 years 327 00:25:11,479 --> 00:25:13,159 Suze: at 5% 328 00:25:13,939 --> 00:25:19,520 Suze: your mortgage payment would be $1181 a month. 329 00:25:20,349 --> 00:25:24,739 Suze: So even less by about $50 a month than you 330 00:25:24,750 --> 00:25:30,270 Suze: were paying. But now you have cut seven years off 331 00:25:30,280 --> 00:25:31,839 Suze: of your mortgage 332 00:25:32,910 --> 00:25:36,129 Suze: and you would have been almost exactly where you were 333 00:25:36,140 --> 00:25:40,849 Suze: if you just kept what you had because remember in 334 00:25:40,859 --> 00:25:42,089 Suze: 21 335 00:25:43,189 --> 00:25:46,849 Suze: there, we are three years later, in 24 you had 336 00:25:46,859 --> 00:25:50,930 Suze: paid down three years on that mortgage. Three years later, 337 00:25:51,380 --> 00:25:53,969 Suze: you would have paid down six years and only still 338 00:25:53,979 --> 00:25:56,890 Suze: would have owed 24 years on that mortgage. 339 00:25:57,540 --> 00:26:00,280 Suze: Now, in this scenario, 340 00:26:01,310 --> 00:26:05,150 Suze: you would only owe 20 years on your mortgage. So 341 00:26:05,160 --> 00:26:07,130 Suze: you would have saved money there 342 00:26:07,780 --> 00:26:09,640 Suze: or if you were smart, 343 00:26:10,689 --> 00:26:14,989 Suze: you would go to a 15 year mortgage, which would 344 00:26:15,000 --> 00:26:19,250 Suze: be half a percent less than a 20 or 30 345 00:26:19,260 --> 00:26:20,510 Suze: year mortgage. 346 00:26:21,589 --> 00:26:29,000 Suze: And therefore at 4.5% your mortgage payment would be 1369 347 00:26:29,010 --> 00:26:33,489 Suze: a month, only about 100 and $10 more a month. 348 00:26:33,650 --> 00:26:38,290 Suze: But now you would have cut out 12 years from 349 00:26:38,300 --> 00:26:42,420 Suze: your mortgage. Now, I understand that your head is spinning 350 00:26:42,430 --> 00:26:43,089 Suze: right now 351 00:26:43,540 --> 00:26:46,380 Suze: and you're like, Suze, you can't do this to us. 352 00:26:46,390 --> 00:26:50,639 Suze: Too many numbers. I just can't comprehend them all. Not 353 00:26:50,650 --> 00:26:55,040 Suze: only can you, but you must, you must be able 354 00:26:55,050 --> 00:26:59,149 Suze: to do the numbers to figure out. Does it make 355 00:26:59,160 --> 00:27:03,050 Suze: sense for you to sell and downsize even though your 356 00:27:03,060 --> 00:27:06,500 Suze: interest rate will be more? Does it make sense for 357 00:27:06,510 --> 00:27:10,020 Suze: you to downsize and buy something outright? 358 00:27:10,430 --> 00:27:14,209 Suze: Does it make sense for you to rent versus own? 359 00:27:14,540 --> 00:27:18,410 Suze: What does it make sense for you to do? And 360 00:27:18,420 --> 00:27:22,599 Suze: if somebody doesn't teach you the numbers, if somebody doesn't 361 00:27:22,609 --> 00:27:25,479 Suze: teach you exactly how to figure it out? 362 00:27:26,400 --> 00:27:32,540 Suze: And how to compare 2006 to now 2024. And they 363 00:27:32,550 --> 00:27:36,660 Suze: don't go through all of that with you. You may 364 00:27:36,670 --> 00:27:41,260 Suze: make mistakes, you may be afraid to do something that 365 00:27:41,270 --> 00:27:42,939 Suze: you should do. 366 00:27:44,180 --> 00:27:51,569 Suze: That is the Suze School for May 5th, 2024. And therefore, 367 00:27:51,579 --> 00:27:53,709 Suze: there's only one thing that I want you to remember 368 00:27:53,719 --> 00:27:57,109 Suze: when it comes to your money is people first. Every 369 00:27:57,119 --> 00:27:59,829 Suze: single one of you has what it takes to do 370 00:27:59,839 --> 00:28:03,250 Suze: anything and everything with your money with just the right 371 00:28:03,260 --> 00:28:08,119 Suze: kind of education people first where you are educated and 372 00:28:08,130 --> 00:28:11,410 Suze: then you know about money and once you have been 373 00:28:11,420 --> 00:28:13,560 Suze: educated and you know about money, 374 00:28:14,109 --> 00:28:18,719 Suze: then you can have all the things that you can afford. 375 00:28:18,790 --> 00:28:23,010 Suze: And if you do that, I promise you you will 376 00:28:23,020 --> 00:28:25,449 Suze: be unstoppable.