Podcast Episode - Suze School: Suze’s April ‘24 Outlook

In this Suze School episode, Suze talks about Tax Day, why people are running out to buy gold at Costco, what’s going on in the stock market, Treasuries vs. CDs and more. 

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Podcast Transcript:

Suze: April 14th, 2024. Welcome everybody to the Women and Money podcast as well as everybody smart enough to listen. Suze O here, and today is Suze School. So, you know what that means—take out your huge Suze notebooks.

I’ve been saying, “take out your little Suze notebooks,” and then I realized, if you’ve really been taking notes this whole time, there is no way that they’re little anymore. They have to be big—or maybe you even have one or two of them. But no matter whether they’re small or large, take them out because there are a lot of things that I may say today that you’ll want to write down.

Why do I say “may say”? Because there are so many things I want to talk to you about. I want to talk to you about Tax Day tomorrow. I want to talk about the stock market dropping last week—not just a little, but a lot. I want to talk to you possibly about gold, about treasuries versus CDs. There’s so much. So, who knows? I’m just going to see what comes out of my mouth first. I’m as excited to take this podcast right along with you.

Last week was an interesting week for me. I came all the way to Florida simply to do live television. As you may know, our connections on the island aren’t always stable. And if you’re doing a live show or presentation, it’s not good if the electricity cuts off. So, I came with KT back to Florida simply to do that.

And here I am. I was in the middle of doing the NBC Summit for leaders, and ten minutes into it—all electricity, everything—goes dead in the condo in Florida. Obviously, some worker or somebody cut a cable. Now there’s no way for me to do it. And I’m getting all these emails, and everybody’s frantic. They don’t know what to do. But we got through it somehow, because the other panelists kindly took over for me.

That afternoon, I was supposed to do Jake Tapper on CNN and I decided I can’t chance that. But the good news about coming back to Florida is that I ended up needing another root canal, which I got on Friday. And if I hadn’t been here, I would have had to come back and figure out how to do it anyway. So see, everything works out for the best.

I just have to mention this—I love dental savings plans. You can find them at dentalplans.com. Once again, I had a root canal done, and it would’ve been $1,650. This one only cost me $1,000 because I had a dental savings plan. After you get a root canal done, you then have to go to your dentist to patch the tooth. They saw another little cavity, so he filled that. He also noticed a chip in my front tooth (KT noticed, not me!).

Now I go to check out, and they say it’s going to be $800. I say, “Wait one second, I have a dental savings plan with Cigna.” They go back, recalculate—and now I only owe $500 for all that work. So, in one day I saved almost $1,000 that without a dental savings plan, I would have had to pay. And what does a dental savings plan cost per year? Approximately $100. Or for a family plan, maybe $170.

Just for me in one visit—this visit, not even including the other root canal from a few weeks ago—I could pay for like five years of having a dental savings plan. So do you see? You might want to go to dentalplans.com and check them out.

Next—let’s talk about taxes. Tomorrow, taxes are due. I’m just going to assume that if you are listening to the Women and Money podcast, there is no way that any of you are not at least filing your taxes tomorrow—and hopefully at the same time paying what you owe. Or if you can’t do that, at least filing for an extension.

I’m not even going to go into what the penalties are if you don’t do that, that the current interest rate is 8% compounding daily. I don’t care about any of that—because I know you’re smart enough to take tomorrow seriously and that you absolutely will file tomorrow.

I do just have to say one thing: if you don’t file tomorrow and you think, “I’ll file on Tuesday, April 16th,” do you know that one day counts as one month? So if you’re just one day late, all the penalties and interest are assessed for an entire month, even though you’re just one day late. Just think about that.

But again, that’s not what I want to talk to you about. So many of you are going to be getting a refund this year. The average refund is $2,753. And many of you are thrilled because it’s like you were saving money and now you get it in one lump sum.

But you know what you've done? You've given, if you're in that situation, an interest-free loan to Uncle Sam. You're not even related to him, everybody! So for one year—or approximately $229 a month—you and millions of others are letting the government keep your money for you. They're earning interest on it, they're making money on it, but you are not.

So do you really want to give an interest-free loan year in and year out to Uncle Sam? Especially when you could be taking that $229 a month and doing what? Paying off your credit card debt and saving the high interest there, putting it towards your mortgage if you want to own your house outright by the time you retire, maybe putting it towards your emergency fund and making 5% on that money, or putting it in a Roth IRA—start to fund your retirement account with it.

There are so many things you could be doing with that money rather than just letting them take out more than you owe simply for you to get a tax refund back. Now, many of you may say, "But Suze, at least I’m going to get $2,700 back or whatever it may be." And then I'm like, what are you going to do with it? And before you know it, it's all frittered away. You didn’t save it, you didn’t put it in a retirement account, oh—you probably just put it in your savings account or checking account and little by little, it's gone.

So I’m just asking all of you, if you're going to be getting a tax refund this year for 2023, let's make this the last year that you ever get a tax refund. Just adjust everything—your exemptions, your withholdings—so that you don’t underpay, but you also don’t overpay.

Next—the stock market. What the heck happened last week? I know a lot of you are thinking, "Well, inflation is going up. Oh, here we go again. Oh my God, I’m afraid." And it’s true, CPI went up a little bit—not a lot, but it did go up. It was hotter—inflation is hotter for consumers than what the Feds wanted.

But then the Producer Price Index came in and that was a little bit less. And on that day, on Thursday, the market went up. Everything was great. It was as if it was going to even out. And on Friday, the market just blew its cookies and went down again. Why?

Because everybody seems to be afraid—and I think rightfully so—that this weekend Iran is going to attack Israel. So because of the fear of war and what can happen if that goes on—because President Biden has already warned Iran not to do that, and the U.S. would stick by Israel’s side—bam, here we go. You never know what will happen. So because of that, people aren't willing to risk their money anymore.

Right now, anyway, until that type of news settles down, that news is more unsettling to people than inflation being a little hot. War really scares us. When that happens, people want their money safe and sound. And what do they do with it? They tend to put it in gold. Gold is the only thing that has been really going up this week.

And what's interesting is it's around $2,300 an ounce right now. And it's projected to go as high as $2,700 or even $3,000 an ounce. So it absolutely can go up there.

A lot of you have been intrigued—and I talked about this on the segment I did with Erin Burnett—about the fact that Costco is selling one-ounce gold bars. They're 24-karat, so they’re almost pure. You can go there, you can do it online. They're only allowing five per person, and there's been like a stampede—$200 million a month right now in people buying gold bars.

Now, number one, if you're going to buy gold bars because you just want to hold it in your hand and you’re going to buy it through Costco—the best way to buy it through Costco is if you are an executive member, which I think is $120 a year. Then that gives you 2% back on everything you buy. So if you’re going to buy something that expensive, you’d get 2% back. Also, many of you may have credit cards that don’t have limits on cash back. You might want to use your credit card that month to get a percentage back as well off the gold bar purchase.

So Costco adds a little bit of a percentage—1 or 2%. That kind of evens it all out. But as I said on CNN, remember when you actually own the commodity—a gold bar, in this case—you have to remember it’s not going to be insured. If something happens, and it’s in your house, and all of a sudden it melts in a fire—don’t think that didn’t happen. Back in the Oakland Hills, when homes burned down, people had a lot of gold in safes. The safes got so hot that all the paper in it disintegrated and the gold melted. It was a mess.

So that’s number one—where are you going to keep it? And let’s say gold skyrockets—it goes up to $3,300 an ounce. Then there’s no threat of war, everything settles down, and now you want to go sell it. Where are you going to go? Because when you sell it, they’ll also take a fee, they’ll weigh it, and make sure it’s still 24-karat gold. So it’s not quite as easy as simply buying a gold ETF.

If you’re going to buy a gold ETF, probably the most pure play is GLD. That’s just something for you to think about. Up to you if you want to continue to buy it or not.

But I really want to talk about the stock market and what’s happening in it in terms of should you be freaked out or should you not. So I want all of you to listen to me closely right now. I want you to think about what you are invested in.

Because the truth of the matter is that if you have years before you need this money—and when I say need it, I mean need it to pay off the mortgage on your home, need it to fund a college education for your children, need it for something like that. Not necessarily you just get older and therefore you need the income from it. No, I mean need it where you have to cash out of the stocks that you have and put it into cash.

Otherwise, if you have years and years until you need this money, then why in the world would you want this market to continue to go up and up and up and up? That means if you continue to dollar cost average, as I've been asking all of you to do over time—whether it's one month, every three months, every five months, whatever it is—when you are seeing stocks that you like continue to go up and you are buying them, obviously you're buying them at a more expensive price.

The true magic of dollar cost averaging is when you have purchased a stock, an ETF or a mutual fund, and then it goes down in value and down in value, but you know it's a good stock, you know it's a good ETF, you know it's a good mutual fund, and over time it will go back up. Then you are getting more bang for your buck. Now you are buying something that you really like and you want to have, and you're buying it on sale and you're bringing the cost—what you paid per share—down.

Now, if you also follow what I've said—and I've always said to you—I love dividend-paying stocks. I love dividend ETFs. Because in times when the market does go down, you're still getting a dividend. You're still getting income. And the truth of the matter is that dividends make up a good portion of your return, especially if you're reinvesting those dividends in the stock that you own.

Some of you need to live off of your dividends—that’s fine—but many of you don’t. So even if you don’t need to live off of them, hopefully you are reinvesting them back into the stock. And if the markets are going down and you're reinvesting your dividend, that means you're actually getting a higher yield on that money.

Think about it: if you buy a stock and I'm just going to make this very simplistic, and you buy it at $10 a share, and it pays you, let’s just say, a 50 cent a year dividend for the entire year—you paid $10, it’s giving you 50 cents a year, that’s a 5% return on your money. But now all of a sudden that $10 stock goes down to $5, but that stock is still paying a 50 cent dividend. Now that means you are getting 10% a year on your money. That’s a big deal.

So actually, on a dividend-paying stock that holds the dividend—it doesn’t decrease the dividend—and it’s only going down because the market itself is going down, not because something’s going wrong in the company and they need to cut dividends—now as a stock goes down and you're getting that dividend and you're buying more stock, you're actually increasing your overall yield as well.

So I’d like you all right now to really just stay calm. Is it possible that these markets could absolutely continue down over the next week, two, three, or year? Sure. The economy is good. We're in a good cycle. But if we have a war, if something happens—and you have to invest as if something could happen at any time—because it could. September 11th, 2001 happened. It could happen at any time.

And when something happens, you have to know that you can last that period of time from when something goes way down, all the way back up again. Having stocks invested in dividends or ETFs is a nice way to allow that to happen for you.

If you think back on time, the major money that was made in the stock market of recent times happened twice: in 2008-2009 when markets crashed—what happened last week was not a crash—and then again in 2020 when the pandemic came around and many, many stocks crashed, especially energy stocks. They went down to almost like $10 or $20.

And if you had held on to Exxon, Chevron—if you had been purchasing stocks like that, purchasing the XLE that came down dramatically (the ETF for energy)—and you had simply held on, today you would have made so much money, at least on paper. I can’t even tell you.

So the key is to hold and be bold. Be brave. Have conviction in what you own. And if you don’t have conviction in it, then you should be selling it. Because these are things—these are your assets—that you own. And again, especially if they’re giving you dividends, and especially as they are going down, you are buying more. In the long run, you should be OK.

Now, what is the long run? It could be three years, four years, five years or more. Which is why I have always said, for those of you who need your money within five years, that is not money that should be invested in the stock market. Because a lot of times it will take five years to go from its high to its low, back up to its high again.

And once again, I will always repeat this—what do I mean when I say need? You need to sell because you need cash in order to buy something. That’s the definition of needing your money. If you’re in retirement and this money is invested in dividend-paying stocks that are paying you good dividends and you don’t need to cash it out, you just keep it. Even if you are in retirement, some of the best investments you can make—even in your retirement years—are in dividend-paying stocks that could also give you growth, which keeps you up with inflation.

So that's where we are right now. I don't want you freaking out here. Don't let the people on the news or the people who are writing articles freak you out. Just stay the course. And as our good friend Keith Fitz-Gerald says, you have to be in it to win it. But if you're in it, you can't be afraid.

Because remember, the goal of money is for you to be secure. And if being in it makes you insecure, then it's not worth it. Then you learn to do other things, such as treasuries or CDs. Which brings us to our next topic: Treasuries.

I do want to point out one huge difference between treasuries and CDs. With a treasury, you do not have a choice—especially a treasury note or bond—you do not have a choice whether they pay interest out to you or not. Every six months, they pay interest out, and you have to take it. So the interest that they are quoting you, that is what you are actually going to be making on your money with the fact that they're paying you out that interest every six months.

With a certificate of deposit—let's talk about the one at Alliant for a second—you can absolutely take your interest out every month if you want. It’s up to you. Or you can leave it in there where it will compound for you. And it compounds monthly. So that's the difference among many other differences between the interest rates that are quoted to you for a CD and a treasury.

So for instance, when you look at the interest rate for, let's say, a 12-month certificate of deposit at Alliant Credit Union, if you take your interest out monthly and you put in, let's say, under $75,000, your interest rate is only 5.03%. If you leave your interest in there for the whole year, that's how you make the 5.15%.

So when you're comparing the interest rate on a CD with the interest on a treasury, you have to know which interest rate is comparable. Because if you're leaving your money in the CD and you're getting an interest rate, that’s not quite comparable to a treasury where your money is coming out every six months. So I want you just to take that into consideration when you're choosing right now between certificates of deposit and treasuries.

So hopefully, if you do have a treasury and they pay you out every six months, but you don't need that interest, that you take that interest and you put it somewhere where it makes interest so that you can compound that way. But in the long run, remember, if you have a CD and you're not taking out your interest, the interest is making that money as well. It's compounding in a way that in a treasury, it doesn’t compound the same way.

So I just wanted to point that out for you if you are comparing rates.

So many of you have taken the Stay Smart quiz on the Alliant Credit Union site, which is myalliant.com. It's just five questions. Answer them. See—are you smart or not when it comes to your money? Very, very easy. And then there's a place for you to enter your email. I just suggest that all of you do so. And one day shortly here, I'll be able to tell you why.

So, have I covered everything that I've wanted to cover? I think so, for right now. But here's the bottom line, everybody: gold will probably continue up. If you want to buy it, I still think the best way to buy it is just through an ETF. But if you want to own the commodity, OK. But just be careful with it, because if something happens, you lose it or whatever, it's not insured. All right? That’s number one.

The stock market—let the stock market do what the stock market is going to do. Just make sure you're in good quality stocks. And that’s another reason, by the way, I like when you have dividend-paying stocks. Because as the market goes down, you’re actually getting a higher dividend yield or interest rate than treasuries and/or CDs are paying you. And eventually, those stocks will come up as well.

One little caveat here is that our energy stocks for now are really doing great. Why? Because of the threat of war. When that ends and things change there, don't be surprised to see those go down as well.

So we have the stock market. You now know what to look at treasuries and CDs with. And I hope you found this Suze podcast illuminating. But until Thursday, when Ms. Travis joins us again, there’s only one thing that I want you to remember when it comes to your money, and it is this:

People first. Then money. Then things.

Now you stay safe and unstoppable.