401k, Financial Independence, Financial Planning, Financial Security, Podcast, Retirement, Roth IRA, Savings
June 13, 2019
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In this Ask Suze Anything episode, we get questions from Shelly, Jackie, Martha, Frannie, Jane, and Alestra. These Women & Money listeners ask about: maintaining financial independence in marriage, selling and buying a home for the right reasons, and should you leave a job you love, just because someone else thinks you can do better.
June 13, 2019. Ask Suze Anything. This is where you write in. If your question is chosen, then I answer it on this podcast. The very best way to write in is to write your email to ask Suze. That's S-U-Z-E podcast at gmail.com. Now in the past you may all have missed this. I was absolutely answering every single one of your questions. But now we are growing and growing and growing and for that I thank you, continue to spread the words. Please help me help you. You should tell every single woman, and man smart enough who wants to listen, about the Women & Money podcast. The only way that it is advertised and it gets out there is through you. You do not see it anywhere else because I want to know what can we do. One woman, to another woman, to another woman. Can we create a community, of really strong, smart and secure financial women. I think we can, but I need your help to do so. Also, if you would be so kind, when you are listening to this podcast or you go to Apple podcast, can you give it a rating? Whatever you truly believe, or leave a review. Whatever you feel about it. Can you say it? But again, this is Ask Suze Anything, so we are going to see what we have been asked, and today we start with Shelly. Hi Suze. What is the best way to maintain my financial independence while married? Before I go on and even read this, I just, I just, does that question - even the first line of that right? The first line of that email makes me wonder, whoa, is this a good marriage? Is this why is she asking that? Does she not feel like she's independent? It just makes me wonder. I continue. However, I'm 50, together nine years, married five years. I have my own career, checking, savings, credit cards in my own name, good on you Shelly. Every single woman. Every single woman. Should have their own checking account, their own savings account, their own credit cards, their own retirement accounts, all in their own names. She goes on and says I purchased a home two years ago while married in sole ownership in California. I file married, filing separate. Now as you're listening to me read this, take a note. She files her taxes married, filing separate. That is a big deal because when you file your taxes and you are married and you are filing separate as if you're not married, you cannot make over $10,000 a year if you want to have your own IRA or Roth IRA. There are so many things you cannot do. It's like you're punishing yourself almost for being married financially speaking. We go on. My children, 26 and 21, are my beneficiaries. I don't have a prenup. Considering a postnuptial, but haven't done my homework yet. How do I protect my financial independence? Is divorce a better option financially? I have my husband's support. Only concern is medical and dental benefits may be lost in the divorce. I love my husband. We'd remain partners. But I love myself, financial independence, inner peace and making my own decisions about my own money. Shout out to Women & Money! Any direction would be appreciated gratefully. Shelly. Shelly, this is one of the strangest emails I have ever gotten in my life. Because you absolutely are putting money before your husband for some reason. Even though you say I love my husband, you say but I love myself. Normally whenever somebody says but, the truth comes after the word. But everything before that word but usually is not the truth. And yeah, you would remain partners. But for whatever reason you love your money. You love your financial independence. You love your inner peace. You love making your own decisions about your own money. So you might as well file and get a divorce because if you got a divorce, you then would just file your taxes as an individual, and then you would be able to have a Roth IRA, you would be able to have certain benefits that you can't have now because you're being financially penalized by filing married filing separate. So all the reasons that you would want to be married, you want to leave your money to your husband, you want to own a home with your husband or your spouse, all of these things, you're not doing. You left everything to your kids as your beneficiaries. You own a home in just your individual name. So are you really married? Are you not married? I don't know. You already answered that. Why don't you just get a divorce and live together? It's just that simple. Next one is from Jackie. She says, hey Suze as someone with a past as a waitress who transitioned into the financial sector, before I go on, if you didn't know, I was a waitress till I was 30 years of age. Until I got my first job as a financial advisor at Merrill Lynch, and the rest is pretty much history. Again she says, I thought you would be a great person to help me feel this potential big life transition. She says I have been waiting tables in New York City for most of my adult life. Like many people I moved to the city to work in the arts. Which I have always pursued on the side, but has never quite taken off. Thankfully I had good mentors in my life, and your book. And I have used my knowledge to buy an apartment with my husband, an investment property, and invest in the market in a cash account as well as in my IRA and Roth IRA. Recently at my day job, I met a wealth management VP at a big investment company and we got to talking. I told her about some of my financial plans and what I have done, and she gave me her card. Fast forward through two months of HR interviews etcetera, and I'm being offered an entry level job as an associate. I feel like this is an amazing opportunity. The real pull of the financial job is learning new things, and really taking charge and getting respect from others. What do you think? Now there's a lot more in this email, because it goes on and on, and I wrote this woman back. And we went back and forth with each other. Number one she makes $110,000 a year as a waitress. I don't know, I think that's a whole lot of money. And her husband who is a mechanic makes a lot of money. And it turns out, after going back and forth with her in emails, that she absolutely loves her job and the freedom of her job. And it really boiled down to what other people thought about her, this is in my opinion anyway, of being a waitress. After many times of going back and forth, it's been decided now that she is going to stay a waitress. She told me that I had been in the restaurant years ago, but I sat in another station, and she wasn't allowed to come over and say hi. And I said to her, if I'm ever in New York, I will come to your restaurant and this time sit in your station. And guess what? I did that just a few days ago. And I got to meet her, and hug her, and talk with her, and I'm still communicating with her to this day. And it was fabulous. And she's a fabulous waitress. And I sat there as she was waiting tables, and I saw the joy in her face doing what she does, and having the freedom to do what she does, working 30 hours a week. So why did I read this email to you? You are not to let others opinions about what you do shape what you do. There should be pride in everything that you do, no matter what it is that you do. You know, I'll never forget in 2002, I was in the hospital for quite some time, and I think I've talked about that before, but I'm not going to go into that. But I spent a number of days, almost 10 days in a hospital, and as I was leaving, the man who would mop the floors every day and everything. I was sitting there in the wheelchair waiting to be rolled out, and I started to talk to him and I said, are you married? And he said, oh yes and I have a son. But I really hope that one day my son grows up to be different than me. And as I was talking to this man, and it turns out he works two or three jobs. He, he actually has quite a bit of money saved. He's really hard working, and he's happy, and he loves what he's doing. He's been doing it forever. And this man says to me, but I sure hope my son doesn't do what I'm doing because I know that he's not proud of me. And at that moment I remember sitting there, and my heart broke. Because if that had been my father, I would have been so proud of him. Because what he was doing, he was doing because he loved doing it, he was making good enough money, he had saved for everything, and he loved what he was doing and he was so kind about it. So never let others judge what you're doing, and never let yourself judge that you're less than because you don't have one of these white collar jobs. And all you are is a waitress, or all you are is somebody who mops floors, or are a garbage man, or whatever it is. As long as you love what you are doing, that's really all that matters in life. So I just also, I just have to say this one thing, a woman wrote in a little bit ago and she told me she was a waitress and I answered her email and she took it so the wrong way. She said, I'm never listening to your podcast again. I can see that you judge waitresses and blah blah blah blah. And she just took it so wrong. So if that woman out there happens to still be listening, please know. And I tried by the way to write her and tell her no, no, I didn't mean it the way that you took it. But no, she was stubborn, she was stubborn. She wanted to stay on it. So she's out there. I hope you know, you're just wrong. I really value any job that you love doing, is a job worth doing. Okay Martha. She says, Suze, I'm a 42-year-old mother of a 15-year-old and a two-year-old. I own my home, which needs several repairs I cannot afford. The foundation, currently no AC in 95 degree weather, minor plumbing, drywall throughout the home, flooring all three bedrooms, kitchen and living room needs to be repaired. I also owe current year taxes. I moved back to my home after leaving my son's father. I was laid off during maternity leave in 2017. I took a job in 2018 that only pays $17 an hour. I am still employed there. It's barely enough to support us, let alone pay for ongoing old repairs. I was in a panic state as to what to do, and had two offers to sell the home to investors offering $60,000. I backed out because I felt like renting would blow through my money, and I do not have the sufficient credit to put down on a new home. Even if I did, I am not making enough to afford a mortgage. I'm at odds as to what to do because the job market is so flaky. The home is falling apart, and I have hopes of gainful employment soon to be able to start fixing it up, but it seems the next thing always starts to fall apart while I wait. Please advise. If you own a home that is absolutely falling apart. It has no air conditioning; everything is going wrong with it. And the only reason that you are holding onto that home is your fear of never being able to own another home, it is your fear that is making you poor. Right, now we have three things. Originally, we had a podcast, don't rush to be poor. We had another one a little bit ago, your mind is making you poor. But fear will make you poor more than anything else. Fear is the main internal obstacle to wealth. You are telling yourself, you're never gonna be able to do this. You're never gonna be able to do that. So therefore you have to stay in a situation where it is not healthy for you or your children, because you are afraid you're going to run through that money. You're afraid of this. You're afraid of that. When you are afraid you are rendered powerless. And when you are powerless, the number one law of money kicks in. What is that everybody? When you are powerless, you repel people. People control money, and therefore when you are powerless, you repel money. So of course you're never gonna be able to afford anything, because you are saying those words. When are you going to understand that your words are more powerful than you have any idea? They have the power to create or the power to destroy, and the choice is up to you. How many times have I told you that your thoughts create your destiny? Be very, very careful about what you think because what you think you eventually say, be very careful of the words that you use because your words become your actions. Your actions become your habits and your habits become your destiny. So, no, I do not want you to sell this house to people who are coming to you, offering you 60,000. Because if they're offering you 60,000 and you haven't even put it out there that you want to sell it, that means it's worth a whole lot more, and they are just hoping that you will panic and you will sell it. So therefore I want you to get two or three real estate agents to appraise it, and see how much you can actually get for it. And then I want you to sell it and rent in an apartment. And live in a place with your children that is healthy. You should have air conditioning when it is 95 degrees out, 100 degrees out, 105 degrees out. Are you kidding me? But more than anything, I want you to stop. I want you to stop sabotaging yourself, stop committing financial suicide by thinking these negative thoughts. Thinking that you'll never be able to succeed. You'll never get a job. That the job market is flaky. Nothing's flaky out there but you and your own thoughts. So you need to create a new truth. Go back and find the podcast that I did on creating a new truth, so that you can feel strong. When you get afraid, you have a friend you can go to, your new truth. Whatever that may be, but that is what you need to do. So stop doing this to yourself. Okay, there we go, Frannie says, hi Suze, love your financial wisdom. I have a pension, stock purchase and 401K at work. My question is the 401K I have my money in is in one of the progression plans 2035, 2040, what she's talking about here is a target date mutual fund which does all the investing for you. That's what she's saying here. The question, is I have heard you say invest in index funds, but this is unclear to me. Can you shed a little light on this? Frannie, I am just somebody who has never loved target date mutual funds because I don't believe that you invest according to age. I believe that you invest according to what is happening in the economy at the time that you are investing. So I'm personally a believer, really, in more stocks than anything else. Especially stocks that pay a dividend as you get older so that if the market decides to go down, that you're okay because at least you're getting a dividend. And, I don't like target date mutual funds when they invest in bonds, or a portion of your money in bonds, because again, when interest rates go up, the value of bond funds go down. Now, there are many arguments, some people really love target date mutual funds, they're not going to kill you by any means financially speaking. So if you feel comfortable there and it's okay, stay there. I just personally really like to go for growth for as long as you can possibly go for growth. It's really just that simple. Oh this is a fun one, this is from Jane. Hi Suze, I have a quick can I afford it question for you. You all know I'm thinking about bringing back can I afford it on some type of TV thing because it was so popular when I did it on The Suze Orman Show, and all of you are writing me in saying, can't you do a Can I Afford It segment here on the Women & Money podcast? So here's a little one for you. My partner and I are planning a month-long European vacation for next year. It's going to cost about $10,000. We have $0 in credit card debt, no student debt, we bought a used car last year and payments are about $350 a month. All right. We have $500,000 outstanding on our mortgage, with about $310,000 in equity. Home equity aside, we have $800,000 in savings and investments in 401K. Combined income is 200 to 250,000 year. And we're both in our mid-thirties with sparkling credit. We know it's a big splurge, but we think we are otherwise responsible, so approved or denied, tell us Suze? Before I answer this, what do you think? You think I'm going to approve them? I don't know, they have a $350 a month car payment. They have 500,000 still in an outstanding mortgage. What do you think? What do you think Jane? I'm looking at your numbers and here's what I'm thinking, girlfriend, you are so approved, it's not even funny. Jane, you are in your mid-thirties, look at everything you have going for yourselves. You are doing great, so don't worry about it, and go and have a fabulous time. Okay just maybe one more from Alestra. The situation is, that I'm 57 and my husband is 64. We got married four years ago, and we both have children from previous marriages, but no kids together. I have a house in Europe, which I had before I met my husband, so everything is in my name only. I'm selling the house now, and it will generate €300,000. My savings now are €60,000. So for those of you wondering, it's a little bit more than what it would be in American dollars, but not a lot. And my pension in Europe looks good, which I can start to collect in 10 years. I have never worked in the US, so no resources here. My husband filed for his Social Security this month, so he will receive around $2,230. He has his 401K with his ex-employer, and some stock options worth $40,000, and in savings he has 30,000. We are renting an apartment now, and we want to buy a house in the United States. He is willing only to invest $50,000 now in the new house, and expects me to put down the rest. But I don't know if this is a good idea. What would be smart to do? Yeah. Alestra. First of all, your husband is not making the wisest of decisions. You said to me in this email that he's 64 years of age, and he's starting to collect social security, which means that he is collecting social security before his full retirement age, so he is getting a percentage that is penalized, which means that you since you really don't have anything going on in here in the United States, could collect half of his when you reach full retirement age or full Social Security age, but it will be less, because he decided to take less. So number one, that is not the best financial decision anybody could ever make. You married him four years ago. And all he has is 30,000 in savings, some money in his 401K, and 40,000 in stock options. But he's willing to invest $50,000, but wants you to come up with the rest of the money? Over my dead body are you going to do that. This is your money, you haven't been married to him long enough to really know. This is money that should be going to your children, not to his children or to him. So sure, you can sell your house, you can bring it over here. You can you have your pension, everything looks good. But if you buy a house, you do not need his $50,000. You can buy a house with the money that you are going to make from the house that you sell in Europe. And this house is to be in your individual name. Everything about it is to be yours. He needs to make sure that he knows that, and that you have some post-nup or something that says, nope, this house belongs to Alestra. You are to make sure that you have a living revocable trust set up, so that upon your death, this house goes to your children and avoids probate. But you are to keep everything that you have in your individual name, and let him keep everything that he has in his individual name. Obviously you're 57. When you come over here, you're going to need to get a job, because your pension does not start for 10 years. And therefore, that will be the money that you live on. But no. No, it's not what he dictates. It's not that he's willing to only invest 50,000 in the new house and expects you to do something. Oh no, no. You're gonna go back to him, and you're gonna tell him what you're willing to do, and what you expect him to do, period. Maybe the two of you can live off of that $50,000 that he was going to put down. Or he can take the money and he can do what? Pay the utilities, and everything that it takes to keep the house going. But you are going to dictate what is happening because this is your money and nobody is going to dictate you. All right. I'm in a little bit of a mood today. Don't ask me why I'm in a mood because I don't know why I'm in a mood. But these are important emails. They've each made a point, and you need to learn from each one of these. So these are questions that you should go back, over and over and over again, and just listen to, and pull out the little things that I have said that maybe you have missed that could make it so that everything would be great in your life. Remember if you want to send in a question, send it in to firstname.lastname@example.org until next week for the Ask Suze Anything, or Sunday’s podcast. There's really only one thing that I want from all of you. And that is for you all to be strong, smart and secure women. And I can only hope that I'm helping you attain that goal.
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