Podcast Episode - Ask Suze Anything : May 9, 2019

Financial Independence, Financial Planning, Financial Security, Podcast, Retirement, Saving, Student Loans, Tax Return, Taxes

August 01, 2022

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In this episode of Ask Suze Anything, we hear updates from two Women & Money listeners, plus Suze offers advice to Julia, Judy, Terry, and Chris.

Podcast Transcript:

I just want to start a little bit differently. I want to start by reading two emails that I personally just loved. I love them because they were validating as to the purpose of this podcast. Is it just possible? Is it in fact probable, that by listening to this podcast over and over and over again, week in and week out, that you might be able to change your financial life for the better? Is it possible? Or should I say probable, that you could change your personal life, your spiritual life, your psychological life, any life that you are living, all of it, for the better? Because you know, this isn't just about money. This is about how you feel about who you are, because how you feel about who you are ultimately determines what you make, what you get to keep, the quality of the life that you live. Is it possible? Is it probable? And indeed it is. So while these two emails are validating to me, I hope they are encouraging to you. This one is from Vicky Hubble and she says, dear Suze, I've enjoyed listening to your podcast on the weekends. Little did I know, when I listened to you say trust your gut, I would be applying it so soon. Now before I continue, I just want to tell you that the title to this email in the subject area was “trust your gut podcast” saved me $22,000. Do I have your interest now? Alright, let's continue then. Friday, I went to my CPA to pick up my taxes. The receptionist handed me the sealed envelope and asked me to take a moment open it and signed the paperwork inside. When I did, I saw the payment coupon of $25,583. And now she has exclamation marks, as if whoa! My husband recently passed away so I'm doing all this solo and surely, I'm concerned for my retirement. This would have taken a large chunk of money I had hoped to apply to my mortgage. I asked the receptionist to confirm that's what I owed. She did. I then asked to speak to the preparer. I told him surely something was wrong. He just said, no, you made a lot of money last year. Knowing it was no different than the previous year, I just didn't understand. After much debate and a quick nervous review of my s corp return, there was no resolution. He told me to pay by Monday or I would face substantial penalties. My gut said don't do it. I spent today combing through my accounting, and finally tried to wade through my personal return. There it was. He entered my S Corp income in excess of $80,000 twice through my entire return. I asked him to explain, and he admitted his error. My actual text due is $3,733. Nearly $22,000 less than he said. If I had not trusted my gut and did as he instructed, the mistake would never have been found, and I would have lost all that money. Thank you Suze, you not only provide sound financial advice, but so much more. You also give strength and direction to us women which we need and use on a day-to-day basis. I can't thank you enough. You remain my superhero. Yeah! I loved this one because it's true. And it's not just true with a tax preparer. I wanted to emphasize this email, because when somebody tells you what to do, when somebody tells you this is what you owe, when somebody gives you a suggestion, it is essential that you think, does that make sense? That you feel, does this feel right to me? You have to get involved with your money, and how it relates to all of you. Because if something is wrong, you will feel it, and you have got to pay attention to those feelings. All right. Will you just sit with me for a little more? I just have to come and do one more here. This next one is from Linda Marie. And I loved this one because the total essence of my work that I started to do so many years ago was to hopefully teach you how to create a new truth that would silence your fears. When you get afraid, you render yourself powerless. And when you are powerless, the number one law of money starts to kick in, which is while power may attract money, when you are powerless, you repel it. So you have to get in touch with what makes you afraid, and create a new truth that is directly opposite that fear and repeat it. I have a whole podcast on this, you can search it in all these podcasts that I've done and go through it. But here's what Linda says. Taking your advice, I have spoken my truth every day any time as many times as I can. My truth is I'm a good editor, I am a healthy woman, I make great decisions, and I have more money than I will ever need. What I have found is that it makes a difference in how I feel, and how I perform. I do better at my job. I make better decisions about eating and exercise, and opportunities for more money have presented themselves to me, which I have taken advantage of. Now I know that I won't stop speaking my truth. I'll keep listening to the podcast. They make me feel strong, and so inspired. You can do this. You can do this. You hear these women have done it, you can do it. Over all the years I've been doing this, hundreds of thousands of women and men have done this. So my question to you is, what is stopping you? The only thing stopping you is you. So let's change that right now. Alright, I am going to questions that you sent in to asksuzepodcast@gmail.com. Remember if you want me to possibly pick one of your questions and answer them on the air, possibly answered them to you directly or call you, you have to send them in. This one is from Julia. Dear Suze, thank you for your wonderful podcast. Taking control of my finances has been the most empowering thing in my life. I want your opinion. My friend, I was get afraid when somebody says, my friend told me something, why do I get afraid of that anyway? Fine. I won't have a headache here. I'll just read this email to you. No problem. My friend told me she did not rush to pay her student loan and instead saved for her down payment. She told me that the increased value of any property I buy, sooner rather than later, will compensate for the extra interest I will pay for the loan. My payment is $383, and most months I'm paying $1,000 extra. So I should be done in about a year and a half. Is it better to do what she says, or what I'm doing? What do you think? Julia, are you kidding me? While this friend of yours may think that she is so smart, because real estate has been going up and up and up again, was she even old enough? Was she around in 2006? Then if she had done this, she would have bought a piece of real estate with money that she could have been paying down her student loan with, interest on a student loan is about 6.8% by the way. And here she is, and maybe she's in Tampa, and she buys a home for 200 or $300,000. And now the markets crash. Oh her student loan still has to be paid. She has a home that is maybe worth $50,000, she still owes $250,000 mortgage, who knows what she owes. And she thinks she is so smart. Do not get smart with your money, Julia. Do not listen to friends who think that they are outsmarting the market. You get rid of the most dangerous loan of all loans that you could ever have, which is a student loan. Student loan debt in most cases is not dischargeable in bankruptcy. So no matter whether you get sick, whether you get injured, whether you lose your job and you don't pay it, it does not matter. You still owe it. So do not listen to this person. You are to pay off this loan exactly like you were paying it, and after it is paid off, now you have money that you can put into a savings account, the same money that you're putting into your student loan, and just save it, and save it, and save it for you to do whatever it is that you want with it. But you are not to listen to this so-called friend. See I told you, I told you it scares me when somebody starts out saying you know I have a friend, I want your opinion. She told me to do something. Judy asks, I filed bankruptcy four years ago and would like to know what steps to take to rebuild my credit. I still use a debit card. I want to move, and I'm concerned that my credit isn't up to par because of the bankruptcy. I'm 63 years old and need help. Your advice means the world to me. Judy, when you use a debit card, a debit card is like a cash transaction. And therefore, it does not report to any of the credit bureaus. So even though you are paying cash, and I personally think that paying cash for something should mean 10 times more than putting something on a credit card, and then possibly only paying the minimum payment due, I think the whole credit system is backwards. I tried to change that, but no, nobody wanted me to change it. Because God forbid these banks shouldn't make a lot of interest off of you. So you need to start building your credit. The best way that you can do that, if you cannot get a credit card anywhere, is to get what's called a secured credit card. And a secured credit card is simply a credit card where you give them $500, you give them $1,000, and that will secure any transactions that you make. When you make a transaction, they do not take it from that $500 or $1,000 that is securing the card, they bill you and you have to pay it at the end of the month, and that starts to build your credit. So that is partially my advice to you. You say that you want to move, I think probably means you want to move and rent another apartment. Another thing you can do, is just be honest with the people that you are renting from. Tell them that you fell on hard times. That you claimed bankruptcy. But you've saved up six months of rent that you can give them up front, so they don't have to worry. Just you can try it. Sometimes it works, and sometimes it doesn't. But in the meantime, get that secured credit card. This next one is from Terry. She asks, what do you suggest for a retired couple who still has a mortgage and a second mortgage? The house is worth about 375,000, we owe about 250,000. So we have a $125,000 of equity. We were never good savers. We bought the house in 1978. I just have to stop here. Do you have any idea, this house is now worth $375,000, it probably in 1978 was 20 or $30,000 that they purchased it for? Not, maybe not even that much. Maybe it was $15,000. It wasn't a lot. I can tell you that. And because obviously they refinanced the house and refinanced the house, and refinance the house, they now owe $250,000 on it. It's just, anyway. Oh and now I realize why. I will continue with the email. It says we raised four children. All went to parochial schools, all went to college, all got married. And now all but one have children. So we're now grandparents to five beautiful girls. We are receiving social security checks, we are taking pension money, I have a $25,000 a year job. How do we get rid of the mortgage expense now? I'm 66, and my hubby is 68. I chose this email originally, because I get that you all want to send your kids to grammar schools to high schools, to colleges. You want to take care of everybody. And in the end, there really isn't any money now for you to take care of yourselves. And none of you have what it takes, even though if you just listen to my podcast a few weeks ago, tell them to help, you don't ask them, you would understand why this is just so aggravating to me. Is that now, here you are. You're 66, your 68. You don't have the money to pay off the mortgage, you probably still have 30 years left on the mortgage, and in your head you're gonna be paying this forever while everybody else is great. You weren't good savers because why? You used the money to save your kids rather than to save yourself. So how do you get rid of the mortgage expense now? I have to tell you Terry, at this age with you making $25,000 a year before taxes and you only get social security and a little bit of other money according to this, you probably should seriously look into selling the home. You have a $125,000 of equity in that home. You should look at seeing what you can buy, a small apartment, a small condo, anything. Or maybe you rent, I don't know. But where you can buy something outright for 100 and 25,000. Or if you don't have another penny to your name, just rent and keep the $125,000 safe in case of an emergency or you need it, but it wouldn't kill you to ask your kids to help you. Just a thought. Alright, let's take one more. This is from Chris. And it's an interesting subject. Because in the subject area it says Suze, I love you like you love Roth IRAs. Boy, I've never really been compared to a Roth IRA. I mean, do you love a person is, but I won't get into it. Fine, no problem Chris. I will just simply take that as a compliment. All right, Suze. I got my hard work ethic from my father. He worked all of his life and loved working. When my parents were divorced, I was 10. I lived with my father full time. My brother lived and was raised by my mother full time. I do not have an easy life. I'm a teacher now and worked several jobs my entire life to go to school. At the time it sucked, my dad would barely help me. Not because he couldn't, but because he wanted me to understand how hard it was to actually make money. Now for my brother. He is 52 years old. Can you just tell everybody where this is going? Can you just tell already? Just, just imagine what Chris is about to ask me, because I can imagine so, just just imagine this. All right. Do you have it in your head? Is it fixed there? Here we go. Now for my brother. He is 52 years old. He has not worked for 10 years. No, he has no disability. He is a spoiled brat. He has a boat and a car. My mother pays his rent and for his boat slip. He gets $2400 cash for spending money each month. Everything else is paid for. Yes, car insurance, a phone, etcetera. My brother should be happy. Everything is paid for. He is not he is not. He is not grateful, and he is not happy. He says it's not enough. All he does is complain and ask for more money. Really? Please make a podcast on how to not create brats. In order to make a happy child, you need to make a productive child. Parents think that giving their children everything helps them. In my experience, it ruins them. Thoughts? Again, by Chris. Well, you already all know my thoughts on this one. I have a very hard time understanding why you would want to ruin not only your children's lives, because this kid is now 52 years of age. This isn't a kid. This is a grown-up .Chris's mom, when you die mom, what is he going to do? How are you just going to leave him your entire fortune? And if you leave him your entire fortune, does he even know how to do anything with it? And is he just gonna spend it all at once and then it's gonna be gone, and then he's going to be on the streets like others that I have told you about? What about you mom? Are you spending all of your money just to make sure that he's okay, and are you not going to be okay as you get older? So I think Chris, what you are asking me in a strange way, is why? Why is your mother doing this? It makes no sense. And while it might not make sense to you, I just have this gut feeling because I've seen it before, when a couple gets divorced, especially a Mom. When a Mom is involved. She feels so guilty. Because you said that your parents got divorced when you were 10. So I imagine that your brother was quite young as well at the time. And for whatever reason, a mom feels so guilty that she's no longer in a relationship, she starts to overcompensate by buying things, providing things, being this good mother in her mind, by providing financially everything to that child that maybe she feels that she cannot provide emotionally. Because now it is a one parent household. I don't know if that's the reason, but I do know this. My favorite saying is sometimes helping is hurting, and sometimes hurting is helping. I've recently just had the same exact conversation with one of my brother-in-laws. He and my sister-in-law, they have two kids and they sent those kids to private grammar school, private high school. Now these expensive colleges. And they're struggling for money. And when I asked, I asked him, if you had to do it all over again, would you? And to my shock, he said I would definitely think about it. I would think about it because, we now are struggling. They're having a great time, and it's not so great for us. Do not think that money is going to solve your problems when you spend more on your children than you can afford to spend. Do not think by giving them an easy life, that therefore they're going to be more, and therefore have more. If they don't have to struggle, if they don't have to work for it, if they don't have to learn who they are, and the strength that they have, they're going to grow up doubting every move they make in many cases, not being secure, and not presenting themselves with the power that they need to get through the world that has been created for them today. And as Chris ended her email with, it was a little slogan that she put. That I have to tell you, I just love. And it goes like this, nothing worth having comes easy.

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Suze's Financial Strength Test

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.

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