Podcast Episode - Suze School: Own The Power To Control Your Destiny


401k, ETFs, Family, Financial Security, Retirement, Stock Market


April 24, 2022

Listen to Podcast Episode:

In today’s podcast, Suze explains all the steps we need to follow, during these turbulent markets, plus what we can do now with our retirement accounts, so we can control our own financial destiny.


Podcast Transcript:

April 24, 2022. Well here we are, everybody I know, we think that this is going to be a Suze’s School, but I don't know what today is going to be, it's almost like, I feel like when you used to go into school and you had a substitute teacher and she didn't know or he didn't know exactly what was going to be on the agenda and they just kind of were there. That's kind of how I feel today because there's so many things happening in the financial world, so many and I don't even know where to start, where to go with it, what do I focus in on? But there's one thing that I do know for sure and that is tomorrow is April 25 and April 25 in 1915 my mother was born, that would have made her if she had lived 107 years of age tomorrow. Now my mom died 10 years ago, 10 years ago actually on September 4th and KT and myself and KT's twin sister, my sister in law and her husband, we were all lucky enough to be sitting in that room for hours as she was taking her last breaths and I got to see her pass and it was very peaceful and I knew at that point in time that she was happy and I knew she was happy because my mother really wasn't sick on any level and about one month before she died, she was having such trouble eating, she was coughing all the time, she sounds like me, but that's beside the point she really couldn't eat or anything and she was miserable and I said to her as I was sitting with her one day, I said you know mom, it's okay to let go if you're not happy being here anymore, let go, it's okay, we're all okay. And very shortly after that she stopped eating and she stopped drinking any water whatsoever. And one month later she died. Now I think about the power that that took to not eat to not drink, to want to be at peace so much that you just stop doing that which keeps you alive. That takes a strong woman to do that. What was so fascinating about my mother is that before her very ending times. She never would voice what she herself wanted. She always would say if we went out to eat, what are you getting on the menu and whatever we said, that's what she would order when we would take her to get clothes. She never could decide what she herself wanted. We would pick out clothes for her and if we like them, she will allow us to buy them for her. And this went on. And no matter how much I would say to her mom, you have got to know your own thoughts. You have got to know what you want, what's good for you, not what's good for everybody else, but what is good for you. She never could do that until the very end. So, it's an amazing thing for me at the very end of my mother's life to watch her. Maybe for the first time in her 97 years the first time to own the power to control her destiny. And I talked to you about that because I do not want you to wait until you are 97 years of age until you are on your deathbed to own the power to control your destiny. I want you to own the power right here and right now, no matter what age you are, I don't care if you're 25, 35, 45, 55, 65, 75, 85, 95, 105, or any of those years in between all of those ages. You do not have one day to waste. But the one area of your life that you really have to learn is the area of your money and so many of you because of what's happening in the stock market and Friday was an absolutely brutal day. Last Friday, brutal and many of the stocks, many of the ETF all almost of your bonds absolutely went down significantly. Although XLP really didn't go down at all. That kind of held its own and maybe since I mentioned that you have to know that one of the reasons that I recommended consumer staples ETF was not for you to make great sums of money on it, not for it to go up significantly from here, but for it to seriously kind of hold its own, maybe make 2, 3, 4% for you at the same time that it's paying you over 2% in dividends, but just to keep your money safe and sound. So somewhere in your portfolio you did not see it go down, 5%, 10% and all of that, I just wanted to make that clear now, where was I? I should be saying to all of you right now. Alright, class. What do you want me to talk to you about? Where should I take this? And I can tell you from the emails that I'm getting and I'm getting 1,000s right now, 1,000s. All of you don't know what you should do with the ETF the mutual funds and the stocks that you have, especially in your retirement accounts, it's like you are paralyzed. So, I'm going to have to talk about that and give you some ideas as to what you could do. But I just want to go back to a few things where I was right before I got sidetracked, you have to get involved with your money and own the power to control your destiny because what is the goal of money? The goal of money is for you to be secure and insecurity right now is rampant, and I've talked about this on past podcasts. We all felt so great, didn't we? As the markets were going up and up and you saw your statements going up and up and you just felt more powerful, You felt secure, you were buying homes, they were going up and up and everything was great until a rumor kind of started that interest rates were going to start to go up again because inflation was high and everything started to calm down and down. And one of the reasons that last Friday and Thursday afternoon these markets went down so much is because the Feds, I've talked to you about the Feds. I have said that they most likely Jerome Powell, who is the Fed chief, They are going to be raising interest rates probably more aggressively, probably 0.5 in May's meeting. There are many people out there that think that they should raise it three quarters of a percent and the higher they raise those interest rates; they hope to slow down the economy. I'm not sure it will work that way, but they hope to slow down the economy so that inflation starts to come down. But in the meantime, the way that translates is that oh a home that you could have bought a year ago for maybe 2.5 or 3% fixed interest rate is now going to be almost 5.5 and as rates go up, you'll see it at six, possibly 6.5, maybe even higher and why is that? Because they don't want you to be able to think that you can afford a home, so they want you to not buy it. Which slows it down and it's when you don't buy homes, other things slow down because you don't buy stuff to furnish the homes and you stop spending money and somehow that brings down inflation. So that little bit of news more than anything else more than the Ukraine war, more than anything else that's going on. That is what is triggering the market here and certain stocks, growth stocks and I explained this a little bit ago in one of the Suze Schools. They don't do well when interest rates go up, they actually go down. Which is why you see many of the stocks that we're such highflyer technology stocks absolutely decreasing. Which is why you need diversification in your portfolios. What do you do from here? The first thing you have to do is if you have time on your side and you are contributing every month to your IRAs or your 401K’s or your 403B’s or your TSP’s I am asking you do not stop contributing. So you have at least 5, 10, 15, 20 years until you need this money as you are putting money in every month and didn't I tell you to kind of just wait and do it at times when you really see that things are shaky and the markets are going down like last Friday would have been a fabulous day, if you could put money into your Roth IRA and invest it for your monthly contribution. Doesn't matter if it goes down again next week. You did it on a day when the markets were seriously down, and we aren't done quite yet. We're just not. You can see it. I have some of my favorite stocks that I would love to buy here but they're not done going down. You just know it. So, you just have to wait and be patient. Do you know that if you had invested, let's say over the last 20 or so years in the Standard and Poor's 500 Index That you would have produced like an average return of about 6% on your money? Okay. Not so great. But not so bad. But yet. Here is the point of why I want to tell you all this yet. If you just missed 20 little days, 20 days that were like the best days of the stock market over those 20 years, your return would have only been 0.1%. So, I want you to think about what I just said. So, I know that your tendencies right here and right now are to start selling everything withdrawing your money, putting it someplace safe. Just not being invested in the stock market anymore. You've had it. You can't take it anymore and you're out. No, you are not. This is the time where you do have to own the power to control your destiny and you have to look at what you have. And if you like the things that you have, and you have 5, 10, 15, 20 years or longer until you need it. You have got to stay invested right here and right now is not the time to come out of the markets if you haven't done so yet. As long as you are invested in good quality stocks now if all of your money is in technology maybe that's another thing. But if you've been listening to me and you are diversified and your index funds and ETF’s that are following indexes. Okay. Just stay there. Got that everybody. Do you know that the market really has always been our friend? Even though we feel like it hasn't been, we concentrate on the times when it crashed way back. When and then it did this in 1987 and then it did that in 2009 and 2008 and we talk about that. But do you know that if you just put $10,000 in the Standard and Poor's 500 Index like 10 years ago it would be worth $43,000 today. Do you know that? Or if it was 100,000 it would be worth $430,000 today. If it was a million it would be $4.3 million dollars today over time and it takes time. The markets if you're invested properly. Absolutely, can be your friend. However, many of you, many of you are also still invested in bonds. You did not heed my warnings when I said I don't like bond funds. If you're, especially in long term bond funds, you need to get out of them. Many of you stayed in and you're writing me and now asking me what should you do? It's almost impossible for me to tell you what you should do because I don't know enough about you your needs from this money. How long it could stay in there. Will it ever come back? I'm not sure. And if it does it will be a long time. So, do you take your losses? Do you go into something like high yielding dividend stocks that are down here right now paying you a good dividend yield? You know you have stocks like Proctor and Gamble that are paying you to some odd percent great stocks like that or do you do ETF’s that pay you a good interest rate. A good dividend? What do you do? I can tell you one thing though. It's a difficult thing right here. I wish that I could turn back the hands of time and say to you no long term bond funds, no long-term bond funds, no long-term bond funds and you would listen to me but that's not what happened. So, if you're in that situation you have got to sit down and ask yourself the following questions. Do you need income from this money? If you need income from it? Are you getting sufficient income from your bond funds? Yes or no. You have to ask yourself that question. If you're not getting sufficient income from your bond funds and you need income and the bond funds are down here I most certainly would think about selling them here taking a tax loss and then do what look for something that will absolutely give you the income that you need. Again, there are many ETF’s many stocks out there that are paying 4, 5, 6% and could possibly give you growth. So, you have to look at that. There are preferred stocks that are out there right now that could give you a nice yield to your money that have also been hit but will return and go up once interest rates settled down here. Most likely if they're good quality that you have got to make a decision if you're looking at your bond funds and you simply invested in them to keep your money safe and sound and you don't really care about the dividends because many of them now are only paying you really 1, 2%. They're not paying you that much by any means and they're down anywhere from 7 to 12% or so. So, you don't need the income. But you wanted to do that because you wanted to be safe and sound, you wanted to be secure. Well, obviously you are not very secure as you see them keep going down. So, do you then decide? All right, I am going to sell them, take a tax loss. Remember, you can always take a tax loss and offset some of the gains that you may have with those losses. Or you can offset $3,000 a year. If you don't have any gains to offset from your income taxes, that's something that you might just want to look at all of this is assuming by the way that these are bonds and bond funds that you own outside of a retirement account so that you can take the tax losses. But again, many of you are writing me about money that you have invested outside of your retirement accounts. Anyway if that is the situation, you are afraid you own these funds, they're going down. They're not really giving you that much of a return and you are feeling insecure you might want to sell it and just go, all right, I'm going to keep my money safe and sound right now, I've told you about series I bonds. I've told you about treasuries, you can now get a two-year Treasury for almost 2.8% a three-year Treasury for almost 3%. Is it worth it for your security to just simply take that money, increase your yield and know that it's going to be safe and sound and in two years when it matures you figure out what you're going to do with it. Just that simple. But you have to think logically you cannot sit there and just think, Alright, do I just hold these until they go back up again because you have got to understand what will make those bond funds go up again? And the only reason that they would really go up again is if interest rates start to come down and interest rates are not going to come down for quite a while, I don't know is it another year. Is it another two if they raise interest rates up, maybe they'll leave them there for a year or two more just to cool everything down when it comes to inflation? So, don't think that they just go up and then they go right back down. That's not how it works. They stay there for a pretty long period of time, two or three years or even longer you have to think about this logically. And I'm telling you that because I can't answer those questions for you. So, if you're writing me and so many of you are writing me at AskSuzePodcasts@Gmail.com. You're also sending in questions via the Women & Money app. The problem is I can't answer them. And even if I could, there are so many thousands of them and you're listing 10 bond funds that you have 10 ETF’s that you have, there's no way that I can tackle that everybody. That's not what I'm doing here. I'm giving you guidelines that hopefully you follow. So, when things like this happen, you don't have to write me because why I told you a while ago, I don't like bond funds. Now, I just want to make a comment here about the Ultimate Retirement Guide for 50+. That book was written essentially in 2019. And when I write a book, I have to write a book for the majority of you that are reading it and back in 2019 when there were no inflation interest rates were low. You needed to be safe. You wanted some diversity. Alright. I suggested if you want that an intermediate bond fund would be fine. I can't give you unless I'm writing an encyclopedia. All these serious instructions of this and that what I can do is say to you listen to the podcast because I can't go back and change that book. That book has been out there now for a number of years. So, I can't change that for those of you who already have it. But that's why I hope that you follow me on the Women & Money Podcast so that as advice starts to change because things start to happen in the economy that have not happened in years then you'll know what to do. So just know that I still don't like long term bond funds intermediate bond funds if you're in them they weren't hurt that bad. They might be okay as things do turn around if they're giving you a good yield. Alright. Stay there. Obviously, I prefer to shoot you in a short-term bond fund. But the short-term bond funds are not going to give you much of appreciation when interest rates do start to come down years from now and they're not going to give you that high of a yield. If you go in them, they'll keep your money relatively safe. But you would be safer in a Treasury Note for two or three years. Getting your three waiting maybe a little bit and maybe even getting more than 3% In a short term two- or 3-year treasury note. So, there are things that you can do. The Suze School today is about your retirement accounts and something that many of you can do while you are still working for an employer that you may not even know about. And I call it a partial rollover. Everybody has their different names for it. But here's something I want you to know about 70%. Not all employers but about 70% of the employers out there where you currently have your 401K, 403B, maybe your TSP, but mainly 401K’s. They will allow you while you are still working for them to roll over a percentage of your 401K into an IRA Rollover. Now, why would you want to do that? You might want to do that because many of you within your 401K there really aren't options for you to be investing your money right now. That allows you to be safe and sound. Maybe they have a bond fund but maybe it's a long-term bond fund or ETF they don't really have a lot of diversification because they're offering usually just what your company stock and or a few different mutual funds. If you did an ire rollover with a portion of that money within your IRA rollover you could absolutely keep that money far safer and sounder. You could buy Treasury notes there. You could buy possibly individual stocks or ETF’s that give you high dividend yields or slices of them to keep everything safe and sound. But you could do things in an IRA rollover that you can't do in your 401K plan. So that's something that you all might want to think about. I wish I had a magic wand and I could say everything's going to be okay right now. But I can think back to the times when this has happened in the past, when stocks have gone down considerably and it really turned out to be the greatest gift financially speaking as long as you kept dollar cost averaging or you were investing at that time in the long run because those stocks went up. So, it's not even funny, you know I get that there are certain stocks like Netflix that went down so much in one day last week it went down like 35% in a day. Are you kidding me? And it's down about 65% from its high. So, at one point it was at 700 now it's like 200. But when one started to originally invest in Netflix for many of you it was at 90, So you're still up considerably if you held onto it. But all you can concentrate on is the fact that it was at 700 and you lost all of that money, you lost $500 a share. Yeah, that's a lot of money to lose. So then you have got to have an investment strategy and the investment strategy has to be once something starts to go down and it's going down quickly or if something has gone up like a Netflix that has gone from 90 to 200 which is where it was kind of pre pandemic All the way up to 700 in a short period of time, that is not normal. It's not normal. So, then you have got to take profits, you have got to look at all the things that you own and what percentage of Netflix having run so high? Was its part of your portfolio? Was it 20% of all your investments or not? Because you really if you're investing in individual stocks, should have about 25 stocks with each stock not having more than 4-6% of your entire portfolio. So, if all of a sudden you have 25 stocks and one stock now in your portfolio accounts for almost 30% of the value of your entire portfolio, you have to take profits. You cannot have that much money in one stock because if that stock happens to be Netflix and now it's all the way down again, you're miserable. So, you have to own the power to control your destiny. You have to be able to speak up and make decisions that are very difficult to make when it comes to money. And it's not just difficult for you. I'm telling you; it is difficult for financial advisors as well. They have many people calling them, many people complaining to them, many people not wanting to sell when they maybe want to sell, and they can get just as confused as anybody. They are people and they themselves have their money probably invested in those stocks. So you have got to be your own person who disciplines yourself, who looks at your investment, who gets involved, who makes decisions, who, if you read a book that was written a number of years ago, just logically think to yourself, does this still apply? What was happening in the year that that book was written? What was happening in the year, many years before that book was written? And therefore, is that the same thing that's going on right now? Or maybe I should just take a pause and think about it. What has Suze always said? She says she doesn't like bond funds. She likes individual bonds. And I still like individual bonds. If you purchased an intermediate bond that matured, let's just say in seven years from when you purchased it, you would be fine today, you would be fine. Remember individual bonds that are good, you buy them and they have a maturity date that says you will get back your money on that date and between the day that you bought it and the date that it matures, you get bond payments or interest payments. You don't have to worry about interest rates and what everything is doing because you're not a bond trader, you’re going to keep it till it matures. So, you have to think about that. And so all this Suze’s School is about you owning the power to control your destiny and you sitting down rationally and looking at what you have and thinking about it and making decisions now when the market responds like it did on Friday, we are, in my opinion, closer to the end than we were. So, when you see the market selling off 800, points, that starts to be where people are panicking, they are just selling they want out. That is a good thing, everybody. So, if that continues to happen, we're probably closer to the bottom than we were a week ago, two weeks ago, three weeks ago. So, we'll see what happens after this. But the main message of this podcast was a very simple one and it goes like this happy birthday Mama O, I miss you more than you have any idea. Alright, So, before I cry at that one, Well, see, Suze has emotions. That's good. You should know that. But until Thursday there's really one thing that I really want from you and it is of course, to be safe, strong, and secure. But it's really, I want you and I need you to own the power to control your destiny. See you Thursday. Bye bye now.


Take advantage of the Ultimate Opportunity Savings Account with Alliant Credit Union at: https://bit.ly/3vEUTZW

Join Suze's Women & Money Community for FREE and ASK SUZE your questions which may just end up on her podcast!

To ask Suze a question, download by following one of these links:

CLICK HERE FOR APPLE: https://apple.co/2KcAHbH

CLICK HERE FOR GOOGLE PLAY: https://bit.ly/3curfMI

Resources & Tools You Need:

Suze Recommends


Saving, Student Loans, Retirement


How to Avoid This College Mistake That Can Hurt the Entire Family

Read Now

Saving


Are You Saving or Spending This Summer?

Read Now

Investing, Retirement, Family & Estate Planning


Podcast Episode - Ask Suze & KT Anything: Mortgages, Annuities, Rollovers and Trusts

Read Now