Home Buying, Home Loans, Home Mortgage, Mortgage, Podcast, Saving Money
March 31, 2019
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In this episode, Suze talks about her recent one-woman show at the Apollo Theater in New York City and reflects on a question she received from the audience.
Not so long ago actually, it was September 15th of 2018, I had the great good fortune to be able to appear in a one woman show called Women and Money at the Apollo. The Apollo is a legendary theater in Harlem, New York. Where the greatest of the great have graced that stage for tens, and tens, and tens of years now. Going way back. And by the way, if you want to see that performance, you can if you go to Super Soul Sunday Facebook watch page, and all two hours of it is there. And I thought oh my God, I did this. I can't believe it. And then I got a call, and I was asked to do it again on March 16th of 2019. And when I took that stage, for me it was different. Because there weren't cameras there. I knew that it was just between me and the women. It was called Women and Money. In fact, both of them were called Women and Money. And it was me and the women that were in that audience. And the women for that particular audience were targeted at low income women. What advice could I give them to help them rise to their fullest potential? And I was so excited to give that talk. because for me number one to do it at the Apollo again, so fabulous! I can't believe in my life I got to do it again. But also the audience, was the audience that I love to speak to. Women who want to have more. Women who don't even know what their potential is. Women, money, low income. My audience, yes. And I loved what happened that night. I truthfully believe that all the great souls that had performed on that stage, their wisdom entered me that night and in my own opinion, I gave the greatest talk of my life. In fact, honestly, I have to say, I'm not even sure I'm the one who gave it. I always pray to be an empty vessel so that God's words can funnel through me, so that you can hear that which you need to hear. And that's exactly what happened that night. So, so fabulous. And it was during that performance, that somebody asked me the following question. They asked, Suze. I used to own a home and in 2006, 2007, I lost that home. And I've been working so hard because I want to own a home again. But I don't really have the 20% down payment. I don't really have the things that I need like the eight-month emergency fund, blah, blah blah. But I want to do it. What advice do you give me, Suze? And it was there in the answer that I gave this person. That wisdom, true wisdom came through me, not that it doesn't come through me all the time, but that night it really, like I said, was flowing. And I found myself saying these words. Please don't rush to be poor. Please don't rush to be poor. And that is the topic of this week's podcast. So many times we look at our lives, and we want that which we lost. We want it back. And sometimes, sometimes we lose that which we need to lose in order to become that which we are meant to be. True greatness doesn't just come when you get everything that you want. True greatness comes in your life when you've lost something, and you rise above. When something has been taken, and you find the energy to replace it with what you need. Loss can show you how strong you really are. If you just were given everything, if you didn't have struggles, if you didn't have loss, do you really think you would appreciate gain? Do you really think so? Do you have any idea how many trust fund babies I know, women and men, whose parents made so much money, and then they left it to their kids. And these kids, why they may have money, they have absolutely no self-esteem. Because they weren't the ones who made it. They don't have accomplishments in their life. They have nothing that they themselves can be proud of, in many of the cases, not all, all they have is money. And money is not enough to give you a full life. Money will give you an easier life. Absolutely, but it might not give you a happy life. How many seriously wealthy people do I know that are absolutely miserable, they are miserable. And that's because all they have is money. And here's what's interesting about money. When you don't have it, you absolutely believe that because you don't have money, that is the reason that you are miserable. And that money is the key to happiness. And here's what is so funny. Once you do have all the money you could ever want, and you're still not happy, now you are in a real quandary. Because if money is not the key to happiness, then what is? And that's when you have to go on a search inside of yourselves to find out why you are doing without happiness. What is keeping you from being happy? But then again, that is a whole other podcast. This podcast, I also want to be about real estate. And the reason I want to be about real estate and buying a home you can call your own, is because for many of you, that is your dream. Even if you can't afford it. And if you buy a home that you cannot afford, I promise you, you are creating the greatest financial nightmare you will ever be in. So don't rush to be poor. How do you know if you can afford a home or not? First of all, let's lay a financial foundation for you. If you are thinking about buying a home, here are the things that you have to have. You have to know that your job is secure, so that your income will continue to come in for as long as you own this home. Number two. You have to have at least a 20% down payment. Now in some circumstances alright, depending on the areas that you live in. But I want to see you have a 20% down payment. And besides the 20% down payment, I'd like to see you have, in addition, an eight-month emergency fund. Now you know and I know that normally when you go to buy a home, you use your eight-month emergency fund to put down with your down payment. And now you find yourself in a situation where you have absolutely no money because all of your money went in to a down payment. Biggest mistake you'll ever make. When you put 20% down, that normally is a lot of money because it's 20% of a price of a home. Which can be 100,000 in some areas, a million dollars in other areas. So you have to protect that down payment. Because if you buy a home, and you do not have an emergency fund, listen to me. If you do not have an emergency fund, and you get sick, you're hit by a car, something happens, you lose your job, anything can happen in life. And that's how you have to think. You have to hope for the best, but plan for the worst. Do you hear me? So here you are, you have 20% down now, something's happened. And now you can't afford to make the mortgage payments. And one month goes by, you don't make it. Two months go by, you don't make it. Three months, four months. And before you know it, they are going to foreclose on your home. And it is possible, it is possible that the price of real estate since you purchased it may have gone down. It is absolutely probable that when you sell the real estate or they foreclose on you, there are commissions, there are fees, there are all kinds of things. And will you get any of your 20% back? Maybe yes, maybe no. It all depends what the market is doing when that happens. So you don't want to lose your down payment, you don't want to lose the home. You want to make sure that you have the money to keep it. If you can't pay for it for at least eight months with your eight-month emergency fund because by them, maybe you've become, well maybe you found another job, whatever it may be, but you have got to protect yourself. Now that is the first thing to qualify in the Suze School if you can afford a home or not. Number two. How much of a home can you afford? Many of you make this grave mistake. I'm paying $1,000 right now for my rent. I can get a home, and if I have $1000 mortgage, I can afford that. Maybe yes, maybe no. But a home that you buy is not like renting an apartment. When you rent an apartment, you don't have to pay for property taxes, you don't have to pay for insurance, you don't have to pay for maintenance. You don't have to replace something when it breaks. You don't have to worry that if a hurricane or a tornado or something comes through or a flood, Nebraska, has happened in the month of March, 2019. When 70% of Nebraska is underwater. Are you kidding me? Do you have flood insurance? Are you protected? Anything can happen. And that isn't your responsibility when you rent. It's on the person who owns that rental. But when you own a home, all of that is on you. So you need to plan to spend at least 40% more than your mortgage payment. So if your mortgage payment is $1,000 per month, you need to know that you can afford $1,400 a month, month in and month out, no matter what. How do you know that you can afford it? You are going to play house. You're already currently spending $1,000 a month on your rent. Great. Now if this is your situation, I want you to take $400 extra right now, and put it in a savings account at the first of every month. If you find that that's easy for you to do, and you're able to do that for six months, eight months, no problem, you still like the lifestyle that you are living, then chances are you can afford the home that you want to buy if that happens to be your mortgage payment etc. If you find however, that putting that $400 a month away is a struggle, there's a month that you go, you know what, I really just can't afford this. I want to do this, I want to do that, I need to do this, I need to do that. Then you can't afford that home that you are thinking about buying. That's why you play house. You see what it feels like to spend. What it's really going to cost you to own home. Here's the good news. If you find out that you really can afford that home, you now have six months of that $400 or whatever amount that 40% is for you, saved in a savings account that can go towards your closing cost, help you move, do whatever you need to do with it. Fabulous. And if you find out that you cannot afford it, well, you still have saved some money, but what you've really saved, is a financial disaster. A financial disaster. So don't rush to be poor. You will always be able to buy a home when you can afford it. And if you can't afford it, who cares. There is nothing wrong with renting for the rest of your life. Don't be afraid. Don't be afraid. It's alright. Remember, previous podcast. Fear is one of the main internal obstacles to wealth. So if you can't afford to own a home, do you really think that means that you're never gonna have any money or you can't create wealth? The money that you would have been putting in that home, just keep saving it, and saving it, and saving it, and investing it and investing it and getting it to grow. Who knows, later on in life, you may have enough money that you can buy a home outright. There are many seriously wealthy people that I know that have never, ever, purchased a home. Never. So why would you want to rush to be poor? I want you to rush to be wealthy. And the way that you are wealthy, is that you always live below your means, but within your needs. Do you need to purchase a home? No! You may want to. But if you can't afford it, and you don't have the money and that you don't need to do it and you can't do it. So don't make your present day desires of owning something, be the cost of being able to pay for your future day needs. Don't do that for yourself. Do you need shelter for yourself and your children and whatever? Of course you do. But there's nothing wrong with renting. So to be the strong, smart and secure women I want you to be, then you have to really think about things before you do it. And here's something else I do want you to do however. I want you to go to Apple podcast, and I want you to rate this show and give it a star rating. It is starting to gain traction. And that makes me happy. And it makes me happy because I know the information on the show will transform your lives. I know there is no other financial show out there like this one. Because there is only one Suze Orman. And I say that with pride. And you should say that about your own life as well. Don't be a woman who's humble and go, oh it's all right, no problem. Be proud of who you are, be proud of what you have created. Be proud, be proud of the strength that you have. I'm proud of myself. I am proud of my life. And I am so proud to be your host of Women & Money.
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Credit & Debt, Saving, Investing, Retirement