Car Buying, Credit Cards, Home Buying, Money Market
December 15, 2019
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In this podcast, Suze gives us updates from stories she’s shared in a few recent episodes, to remind us that time is money and we should spend it wisely.
Can you believe it? Can you believe are almost at the end of the year 2019? We're about to be in the year 2020. How is that possible? Wasn't it just 2000 just yesterday? Time passes very, very quickly, and therefore because it passes so quickly, you have to make the most out of every single moment that you have. Because time is money. How you spend your time really has a lot to do with your own personal financial success, as well as your children's, your family. You have got to spend your time standing in the truth, even if that truth is something that could possibly hurt, in your opinion, the members of your family. A little bit ago, I did a podcast on pride. You should listen to that podcast because it's in that podcast that I talk about a friend's son contacted me and we started to talk about his student loan. And he knew nothing about his student loan, and he's going to a $50,000 a year college out of state. And I suggested that he asked his father about the student loans and who's going to pay for it? Long story short, his father came back with the answer, "No son of mine is going to graduate college with debt."And that really struck me, and I did a whole podcast on it because that was a statement that his father made out of pride because I know his father doesn't have a penny to his name. I know that he has debt. I know that there is no way that he can afford to pay back any student loans, let alone just pay for his everyday living expenses. Now this man is married, has a daughter as well, and he has been unhappily married now for years, and it's no secret. And his kids knew it, he knew it, but all of a sudden everything came to a head because here's what happened. His son could not register again for next year's classes because he still owed $6000 on 2019 tuition. So now where are they going to get that money? At the same time, finally, the man stood in his truth, and he now is leaving a relationship that hasn't been good. It's not that the people aren't good, they just don't belong together. And that's just sometimes that's what happens, happens more frequently than not. And so now he's leaving that relationship, and it turns out that he's leaving that relationship seriously without one cent. When I mean one cent, I mean one cent, not a penny to his name. And he is going to come and live with us for a few months on the island and get his act together.However, this isn't about him, this is about his son. So now his son, who went for a year to an out of state college, cannot go back next year. In fact, the son has to drop out. It's a shame because he got straight A's, and he's going to have to figure out where does he live? What does he do because the apartment has to go? Everything now has to change in everybody's life. Where this man's wife is going to go live, I don't know. The daughter is fine, she's out of college, she'll get a place on her own, she will be fine. But where does this kid go who's 18 years of age? How does he make it? There's really no place for him to go and live.So here is the question. Were you really helping? Was this man really helping his child by saying it's OK, you can go to an out of state school, I'll just take loans out for it? When I asked this man how he was going to pay back the student loans that he took out in his name, do you know what he said to me? He said to me, I was just going to bankrupt them, Suze.And I said, don't you know, sir, that you cannot bankrupt student loans? That you are saddled with these loans forever. And he just looked at me like I was crazy, but that is the truth. But again, this isn't about him. This is about the son. So now the son and I have been talking, we've been texting, and this kid, as I said before, is such a great kid. And I told him the following. You cannot feel that you are a victim of your parents' circumstances. You have got to take responsibility for the role that you played in what is now happening to your life because you knew your parents had no money. You knew that if you went to an out of state school, how expensive that would be versus an in-state school or a community college. You knew all that, and you chose to turn your back on it and to not look at the reality of the situation because you wanted to hear what your parents were telling you versus you standing in your truth and knowing what they were telling you was not the truth. You knew that. So don't go blaming your parents now for the situation that you cannot go back to school and you're going to have to figure this out. I said if you just have faith that everything happens for the best, then you will see this as a blessing. Because if you can learn the lesson of what a financial lie can destroy in your life versus what's standing in your truth can create, you now have just gotten a priceless lesson that will allow you to go on and build a financial foundation for everything in your life.He texts me back and goes, you're right, I get that, I get that. I am not going to live like my parents. I am going to make a living so that I can support everyone around me. And I write him back, and I go, no you won't. This isn't about you supporting everybody around you. Your father made the mistake of supporting everybody around him before he supported himself. And then I started to talk to him about money, and I said, you do understand that there was a time when your father made a lot of money and the truth is, his father probably made at times almost a $1,000,000 a year. So the question is, why did that money disappear? How do you go from making money, owning a house, to having to sell the house, all the money be gone, renting a place, selling the furniture for money, and now not having one cent to your name? How does that happen to you? And it happens to you when you live a lie. When you live a lie, your money starts to live a lie and living on credit card debt and buying things to fill up your emptiness inside simply so that you can feel better about your life that is going down the drain, emotionally speaking. All of a sudden your money disappears, so you have got to understand why that happens, and it's not your goal to take care and support everybody else around you. Your goal is to support yourself, love your life, like who's in your life and live an honest life. And then money will start to come, and you can do with it as you please, as long as you stand in your truth. And he got that, he got that.He also got the principle that sometimes helping is hurting and hurting his helping. I went on to tell him, you know, it would be so easy for KT and me to simply write a check and allow you to stay in that school, but it wouldn't be right, because you never should have gone to that school to begin with. So you have got to learn the lesson where you made a wrong choice and you are not a victim of your circumstances, you actually are the creator of them. Now, I tell you this update because I actually think that it's a fabulous update. It's an update that sets these people's lives on the path of honesty that allows them to stand in their truth of what they've always known is true but did not have the courage to tell one another about it.And as we end this year, I really want you to think about are you protecting your children? Are you protecting your loved ones? Are you protecting yourself by living a lie? By being ashamed of saying I can't afford it? No, I can't buy you these holiday gifts. No, I can't send you to this school. No, I cannot take out student loans for you and you feel so bad about it. You shouldn't feel bad about who you are, you should be proud of who you are, and money isn't what determines if you should be proud or not. And if you have to say no to your children and you do it with being proud. And being proud is different than pride, especially false pride, false humility. If you do it, you're now teaching your children to also be standing in the truth in their lies, because otherwise, they are the ones who are going to have to pay for it, not because of your mistakes that you are making with money because they are learning to live a lie as well. If you really want to give your kids a priceless gift this holiday season, give them the gift of honesty, of truth, of being proud of who you are, regardless of what you have.Next story. Last week I told you about how aggravated I was at my brother in law for refinancing his house without asking me. And when you have to refinance your house in order to take money out in order to pay off this thing and that thing, you are living a lie because you can't afford to live in that house. And I so would have thought that my own family would know that. My family. And then after I did the podcast, I got a call from my brother-in-law. And my brother-in-law and sister-in-law with joy and happiness said we got the lesson. We got it, Suze, guess what we're doing? We're putting our house on the market this week. We are selling, we're tired of living paycheck to paycheck, and we are going to stand in our truth and we're going to sell and we're going to rent a small apartment and we're going to turn our lives around.And I'm so happy, I was so happy because of my own family doesn't get it after years of me telling them this, telling him that always talking to them about what should and shouldn't be, in my opinion, when it comes to money. If I can't get my own family to understand, what the hell am I doing in the world doing whatever I do? But they did understand and they just got caught up in a moment of a quick resolution. Think about this. You have a financial problem and you just look at how do I solve it in a very fast way, in a quick way, so I don't have to deal with it? And it's in that quick resolution that you normally will make a mistake and forget what you know is true and forget that you have what it takes to do what is right versus what's easy. All of a sudden your mind takes over and you go, oh, it's just easy to refinance into this. It's kind of hard to sell the house, I'm attached to the house, I love my neighborhood, but it's not right for me to keep a house that I can't afford. It's just not right, but it's easy.Therefore, how happy am I? Because after just a little bit off a reminder, they got it again and they became who I always knew them to be. So we all lose our ways. So at the end of this year, as it is coming to a close, if you've lost your way, if you've had or taken quick resolutions that have led you to financial mistakes, don't get stuck in them. Just don't be stubborn. Look at your life, take 2019 the end of it, and look back. What do you wish you had done that you didn't do? What did you do that you were thrilled that you did and really take a financial accounting of the financial moves you made. And any move that you made that you wish you hadn't made: you put this on a credit card; you took out a school loan that you knew you couldn't afford; you didn't tell your kids the truth about something where you are financially speaking; you bought a new car because it was just easier to buy a new car than fix the one that you have, you didn't want to deal with it, and now you're stuck with $300, $400, $500 a month payments. Whatever it is, look at the things that you have done that you wish you didn't do financially speaking, and I want you to write them down. And then I want you to just spend a few minutes with yourself and ask yourself, why did you do those things? When you did that were you feeling ashamed? Were you angry? What were you? What emotion? Fear, shame and anger, the three internal obstacles to wealth. Because if you can start understanding that your emotions get you to do that what you know you should not do with money but you do it anyway, that when those emotions start to rise up within you and then you're tempted next year to do something, you'll be able to shut it down. No, no, I've learned that lesson. Last year I bought the car because of whatever the emotion is. I'm not going to do something like that again.Oh, I told my kids that they could do something that I knew they couldn't afford, but I was ashamed to tell them that we didn't have the money. When that emotion comes up again, you'll recognize it and you won't make that mistake. So I'm asking you as we approach the year 2020 to really stand in your truth, because the year 2020, in my opinion, is not going to be an easy year. It's going to be a year where there is such severe political fighting between both parties and that fighting will permeate everything in the United States of America and actually worldwide.Fighting is anger. Anger is one of the internal obstacles to wealth. If I was going to give you a prediction for next year, I think that we'll be relatively OK. I think in February and March we may see a downturn in this market, I think anything can happen around that time, I've said that before. It just seems like it's ripe for it. And then the markets might go down, then the markets might go up. But probably in November around the election, and I think the election is just going to be a crazy one, by the way. I think that, who knows, I think that we could repeat the Gore and Bush election where we don't even know who the winner is until sometime in December. But I think around that time I think it is possible that we can see the markets start to go down in 2021 right around in November, starting there for a considerable amount of time. So you have to have a plan. You have to know, do you have money that belongs in the market or doesn't belong in the market? Do you have time that if the market does go down because nothing's for sure, you know the market is ruled on emotions, and if people are feeling good and the economy is good, all right, maybe we'll continue to go up? I don't think so.Starting in the end of 2020 but we'll see what happens here, you just have to be prepared. But if you have time on your side,10 years, 20 years, 30 years, 40 years. OK, who cares? Just keep investing and keep doing it. But if this is money that you cannot afford to lose and you see things starting to happen, and you don't have time on your side and you really you know, you need this money in a year, two or three. Just watch it closely, OK? There's no way for any of us to know what is actually going to happen because we're all unpredictable human beings.But it's just let's just be prepared for the year and what happens in 2020, especially starting around February and March, and I hope nothing happens. I hope everything is great, but just let's just start watching as to what's going to go on. Because it's then that these politicians are really going to start going at one another, and I just don't know. I don't know where we go, but I do know this. Don't let how they're fighting with one another permeate your lives. You need to come from a place of love, you need to come from a place of faith that everything happens for the best, and that no matter what happens out there, you just need to know that it is fine, it is OK if you have faith. But to have faith that everything happens for the best, you have to live your best, you have to stand in your truth. You have to say when you don't have something with joy and being proud of who you are, versus what you don't have. And that is how I want you to enter the year 2020, that's how I want you to enter this new year.In providing answers, Suze Orman is not acting as a certified financial planner, advisor, a certified financial analyst, an economist, CPA, accountant or lawyer. Suze Orman does not make any recommendations as to any specific securities or investments. All content is for informational and general purposes only and does not constitute financial accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Suze Orman does not accept any responsibility for any loss which may arise from accessing or reliance on the information in this podcast, and to the fullest extent permitted by law, we exclude all liability for loss or damages, direct or indirect, arising from the use of the information. To find the right Credit Union for you, visit https://www.mycreditunion.gov/.
Answer Yes or No to the follow statements.
I pay all my credit card bills in full each month.
I have an eight-month emergency savings fund separate from my checking or other bank accounts.
The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!
I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.
I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.
I have term life insurance to provide protection to those who are dependent on my income.
I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.
I have checked all the beneficiaries of every investment account and insurance policy within the past year.
So how did you do?
If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.
As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!
But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.
Saving, Family & Estate Planning
Credit & Debt, Saving, Investing, Retirement