Podcast Episode - Ask KT & Suze Anything: Why Don’t I Feel Empowered By My Money?

For this episode of Ask KT and Suze Anything, Suze answers questions about feeling secure in financial decisions, homes in trusts, leasing a car and so much more.

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Podcast Transcript:

Suze: February 15th, 2024. Welcome everybody to the Women and Money podcast. As well as everybody smart enough to listen. This is the Ask KT and Suze Anything podcast.

KT: Suze, how are you doing? Are you ok?

Suze: What do you mean KT?

Suze: Oh, yeah, I'm actually not

KT: She's sad. We're all sad, everybody. America's sad again.

Suze: It's so, so she's asking that because...

KT: We had a whole, we were so excited for today's podcast and sadly, what happened yesterday on Valentine's Day while we're celebrating madly in love. So excited from Sunday's Super Bowl to Valentine's Day to talking to all of you this morning. And it's like, what? Again?

Suze: So what, what KT is talking about is that obviously, you know, by now there was a mass shooting at the Kansas City Chiefs Super Bowl celebration.

Suze: And for me, I was actually watching it on my little iPhone because there weren't any major channels on TV that were covering the parade and everything. So I went, I know I'm gonna watch it on a Kansas City channel, right? And so I did and I was watching it and I was watching Mahomes walk down and say hi to everybody got off the bus and everybody was so happy to see him and he went from one side to the other. And then you saw Chris Jones talking to people and there were all these reporters that were talking to all the players that were walking down the street, then they all took their position on the platform and it was so great, so great, so joyous. 

Suze: They were so happy, so happy and then you could sense something had happened. You didn't know what it was. All the reporters that had been interviewing the players as they were walking down the streets were saying, wait, something has happened. We don't know what's happened. All the police are running somewhere because you couldn't really hear the gunshots. They kind of, they kind of sounded like firecrackers. It was way in, it was in the distance and then all of a sudden you knew something had happened and it was at the very end of it and everybody leaves and everything and then the announcement comes out that there was a mass shooting

Suze: And what it reminds me of KT which is also why I'm sad is it isn't just that that happened. It's that a few minutes before that happened, you had maybe up to a million people that were celebrating that were so happy that they were there with their young kids. They had the day off of school. Everything was as perfect it could possibly be.

Suze: And then many, many people now are injured and you know, whatever it may end up being. And so that makes me think about life and how instantaneously life can change in a second because of somebody else's actions. And then that brings me back to, do you all have a will? Do you have a trust? Have you taken all of that really seriously?

Suze: And I don't know really what it would take to get you all to take it seriously when you see the things that happened that day and that day wasn't just the shooting. KT was it at, at Kansas City?

Suze: It was also also...

KT: February 14th Valentine's Day. It's the anniversary of the Marjorie Stoneman Douglas High school here in Florida where...

Suze: 17 kids were killed six years ago, a few days ago. You know, there was, there was a shooting at Joel Olsteen's church and, and we can go on and on and on.

KT: We need to just get rid of the guns.

Suze: So the real question is, isn't it time everybody, isn't it really time that the gun laws have changed?

Suze: And it's really important that every single one of us, whether you're listening to this now, whether it's me, KT Mahomes, Kelsey, every single one of us needs to start to get behind the laws that change gun laws forever so that these mass shootings stop and it's just that simple. So, I am sad and the truth is all of us should be sad, but from sadness, hopefully change, true change will happen not only with the gun laws but in your own lives to make sure that you have the paperwork in place today to protect your tomorrow's. KT, are you ready?

KT: I'm ready, Suze.

Suze: Let's get on with it. Ask me your first question, girlfriend.

KT: So, Suze, I picked this one from Joseph to start with because he needs a little TLC in, in my opinion.

Suze: Why did I give him a

KT: slap down? No, but listen to this, it's really short everybody but I, I just felt like he needs a hug.

KT: Hi, Suze. Why do I not feel empowered with my money? I'm 39 years old. I have $122,000 in assets including a nine month emergency fund. I have no credit card debt. I own my car outright. I own a condo and I put a down payment on it of $40,000 in 2021. But my issue is I'm scared of taking risks.

KT: So, do you have any tips? He's asking if you have tips? Why do you think he's so, you know, down and out about his money?

Suze: We usually are afraid to take risks with our money because we know how much money means to us, we've worked hard for it. We're willing to invest it. We're willing to buy a home. We're willing to do that, which we know about when it comes to money. When it's simple, we know to save it, we know to do those things and we don't get afraid to do those things. Even like in our 401k plan, we're saving it, but we are investing it in mutual funds and that's what everybody else does. So there's not a lot of fear in that.

Suze: But when we come out of that wheelhouse, the wheelhouse of buying a home, the wheelhouse of investing in a retirement account at work and we have to invest our money on our own.

Suze: We feel like that's too risky.  Like we're not part of a big group. We're just doing it all on our own and what type of an account should we have? And if we do open a Roth IRA, what should we invest it in? And there's just so many things and really the truth about it, everybody is that when you don't know what to do, you get afraid and when you get afraid you just don't do it.

Suze: And so if you like to save, if you like to play it safe, I totally get Joseph, why you would be afraid to take a risk because everything else financially has worked so well for you. You see it growing, but yet you just can't take that one last step of just going for it because you're afraid you may lose.

Suze: So, here's what I suggest to everybody that feels like that. And Joseph, you are not alone here.

Suze: It's the same way when I was younger and I would go to the beach in Chicago and go into Lake Michigan, which was always freezing. You first go up to your ankles and then you go up to your knees and then you go to your thighs and before you know what you're in and you're used to it. The same is true with investing when you're not exactly sure what to invest in.

Suze: Let's say you have $10,000 to invest, you don't have to invest all 10,000 at once. Pick an amount of money, whether it's $1000 100 dollars, $50 it doesn't matter anymore. Given the fact that you can now buy slices of stocks at discount brokerage firm. So if a stock is $1000 a share, you can buy $10 worth of it. So maybe pick five different stocks by $10 each in each one.

Suze: And just see how that feels. See if it grows, see if it all of a sudden goes down, see how you feel. If it goes down and all of a sudden you'll find, oh, they're going up, I'm making good money. Oh, maybe I need to put a little bit more in and then if they are good picks and everything it goes right. You'll get used to it. You'll get used to the ups and the downs. Just like what happened this week when the market went down on Tuesday. Then essentially it kind of came back on Wednesday. It didn't roar back, but it absolutely kind of came back. So that all of a sudden then you're like, oh,  it goes down and then it comes up and you get used to the waves of the financial ocean and then you happen to feel comfortable in it, the more you learn about it, the more you listen to this podcast, the more that you watch shows like CNBC and you just get used to the verbiage and how it works.

Suze: You're gonna find sooner than later. You're not gonna be afraid to take a risk. It's really just that simple. I just have to remind everybody again and again and again, I was still a waitress till the age of 30 making $400 a month and look at me now, nobody taught me about money. You know, I didn't inherit money. Money wasn't supposed to be part of this equation.

Suze: But I learned the language of wealth and the language of wealth is the language of you have what it takes to learn, you have, what it takes to own the power to control your destiny. You can learn everything that you need to know about investing your money, learning about the stock market, how it works, how you take the risk out of it by dollar cost, averaging, just learn the language of wealth and then you'll also learn the language of self.

KT: Wow, Suze!

Suze: Did I just impress you?

KT: You did. That has got to go in my book of Suzeisms because that was a great one.

Suze: So that's a ding, ding, ding for me right KT. Next question.

KT: So this next one is from Lynn. And she said, dear...

Suze: You picked it because that's your sister.

KT: No, because of this, I picked it: Dear Wonderful KT and Suze. I'm looking forward to another year of listening to you two. I have recently updated my husband's and my living revocable trust. Although I'm unsure of how to proceeded about a house we just bought in October.

KT: We have just started this 30 year mortgage and need to ask, should this house be listed on the trust now for my daughter who is only two years old to eventually inherit be the beneficiary of or should this house be paid off first then be listed on the trust to the benefit of my daughter. Two years old, Suze. Tell Lynn how to do it.

Suze: Yeah, this two year old would be able to invest this money and know what to do with this house and be able to make decisions about it. Should she pay it off sooner than later? My dear Lynn, what you need to understand is one of the main reasons that you created a living, revocable trust  is for the benefit of your daughter. If something happened to you and your husband, why? Because minors cannot inherit money. Think about it. You could leave your daughter all the money in the world, but she's two years old, she doesn't even know what to do with a pacifier unless you tell her what to do with it. So what really has to happen here is you do absolutely need to put this house in trust because you absolutely want to bypass probate. But you also need to obviously set up a guardian, a guardian for your daughter as to who's going to take care of her. If both you and your husband are killed, for instance, in a car crash.

Suze: So you have to think like that, KT and I always think about all right, we're on an airplane, we both go down together. Who gets what? Who does, what, how does it work? You just have to think that way, especially if you have a minor child. So the first question is who is going to be the guardian? Because if you do not appoint a guardian and a guardian is actually appointed via your will, then probate court will absolutely appoint a guardian for you. It will be called probate guardianship. You don't want that, you want somebody who really cares about your daughter and takes care of her within the trust. It would probably be the same person as to who you want to be successor trustee, which means who succeeds you. If both you and your husband were to die and it's in there that you would actually leave directions as to how you want that money invested when the daughter is to get that money and all of those things. So, no, do not wait, do it now.

KT: Good. Now, next question is from Erin Taking your advice. I've been dollar cost averaging a monthly amount into my 2023 Roth. I have cash available for a full 2024 payment and I'm considering making a lump sum payment into one of the magnificent seven stocks since they've been doing so well.

KT: Why do you go "Huh?"

Suze: I'll you in a second.

KT: I have a few of these seven tech stocks already and I'm weighing in whether waiting to do a monthly payment is better or to contribute the entire 8000 now that they continue to climb. Suze, don't you want to ask me if I remember what the Magnificent seven stocks are?

Suze: I guess you want me to everybody. The mere fact that she wants me to ask her something means she wants to hear a ding, ding, ding because she already knows the answer. So let me play along with you, KT. KT, do you want this to be your quizzy? Do you happen to? Yeah, you do, KT, what are the seven magnificent stocks?

KT: Ready? Apple, NVIDIA, Tesla, Microsoft Amazon? Meta and alphabet.

Suze: She's doing this on her fingers. Everybody. And how do you happen to remember that?

KT: Because when we first learned about them, you told me I can give you a clue of how to remember. Ant Mama. Aunt spelled a nt. Not a UN T aunt mama because you..

Suze: Are you ready? Ding, ding, ding, ding, ding, ding, ding.

KT: Now, you better answer this question.

Suze: All right, Erin, the reason I keep sighing as KT was reading that question is that I want all of you and I'm gonna respond to all of you here as if you all ask this question because I'm sure you all thought it at one time or another. What would have happened if on Monday of this week, just a few days ago, you had decided to go in 100% into one or two or three or all of the magnificent seven. Monday was an OK day. Everything was great on Monday.Then go back and look at what happened on Tuesday and let's say you bought on Monday, you would have been obliterated on Tuesday. So you have to know that you don't know that everything's gonna continue to go straight up or straight down. You have no idea what's really gonna happen because this is the stock market made up of people and people are unpredictable. Therefore, you have to continue to dollar cost average. Now, if you had been smart and let's say Tuesday had happened.

Suze: You would have gone in on Tuesday and dollar cost averaged into whatever it was that you wanted to buy. Let's say you had $10,000 that you wanted to invest. So maybe you would have gone in and invested $2000 on Tuesday. I can tell you on Tuesday in Colo's account, I absolutely went in and I bought more of the stocks that I love for him and I was actually so happy that the market was down so much on Tuesday because it allowed me to buy more.

Suze: So, regardless of where it went on Wednesday and today, wherever it goes doesn't matter. I bought more of what I wanted and if these markets crash, I'll continue to buy more. If these markets had continued to go up, I also would have bought a little more of what I really wanted to own. So you have to dollar cost average. It's really as simple as that.

KT: Next question is from Elba. Dear Suze.

Suze: I like you just picked one with just my name.

KT: Yes, it's: Dear Suze...

Suze: Oh, you're so sweet.

KT: It says dear Suze. I love your app's Dos and don't cards. Tell people what that is on the app.

Suze: I wonder they might even still be on the women and money community app or maybe I took them off. But with one of my programs, I had the dos and don't of money when it came to buying a home, buying a car, retirement plans, investing things like that because I found out that a long time ago that was more important to tell you what not to do than to tell you what to do. And as long as you didn't do certain things, you wouldn't make mistakes with your money and you'd be ok.

KT: All right. And this one has to do with cars. I wonder if you might consider, Suze, an exception on the no lease rule.

KT: Well, wait a minute, listen to this, listen to the full, wait, listen to it. I have my financial house in exceptional order to carry me through age 99. Thanks to listening to you for decades. And I can afford a very expensive car, but it's an electric car. Therefore, Suze, I wanna lease for three years and then buy one by which time it will likely come down in price and increase in technology quality. I believe I will lose less by leasing since I can afford it. Is it ok to lease in this case?

KT: There you go. And then she says she answers. You are amazing.

Suze: And she's trying to butter me up.

KT: What do you think about that? I mean, it kind of makes sense, right? Can you bend the rules?

Suze: Sure. With somebody who has money that will last till 99

KT: She's in great financial shape.

Suze: Thing I just want to say when it comes to, especially a woman today. And especially maybe if the woman happens to be older, there's something about having a brand new car that makes them feel secure. KT, they don't want to break down on the highway, they want to make sure that they have the latest safety mechanisms and sometimes purchasing a car for just three years and then trading it in isn't worth it either. The concept being, especially if you don't have a lot of money, buy a car, finance it for 34 years at most now and then keep it for 10 or 12 years. So you don't have any more payments. But if you are somebody who feels safer and they want a new car every three years, you are a woman and you are older and you want that security and you have more than enough money to last you till your dying days. Most likely. But then you never know when you might live past 99 and it makes you feel secure, which is the goal of money to lease a car.

Suze: Oh my God, you are AAAAA-prooved!

KT: ding, ding, ding, ding, ding, ding, ding, ding, ding.

Suze: There are exceptions to the rule but not many, but that's only because you have more money than you need. Ok.

KT: Ok. Next is from Rose. I love that name. I always liked that name.

Suze: Rose is a rose... Is a rose. How did that go?

KT: No, here's why I like the name Rose.

KT: Wasn't that the name of her in the Titanic?

Suze: Oh that I don't remember KT.

KT: I like the name Rose. So, hello, Suze and KT I am a 55 year old, single female. I work hard and I do it all on my own.

KT: I currently contribute 10% of my income to my 401k Roth with a 6% match from my employer. I used to contribute 12% but just lowered my contribution in 2024 to help pay off credit card debt. I currently have about $7000 in credit card debt for which I pay an average of 18%. Is it a good idea to borrow from my employers 401k to pay off all or some of my credit card debt?

Suze: Now, KT was a lot like last week's question. But you know, the main difference, the main difference was last week, the person wanted to pay off their credit card debt for money outside of a retirement account. But in the investments, should they sell the investments? They have. This one wants to take money out of her 401k to pay off $7000 of debt. Now, you heard how I answered it last week. Here's the next pop quizzy. What would you tell this person? Yes or no?

KT: No.

Suze: Why?

KT: If she has a good FICO score, she should look into consolidating this credit card debt and

Suze: Doing a balance transfer. And by else not?

KT: You don't want to mess up your employer's 401k. You're Roth. It's a Roth. You have to pay taxes,

Suze: Not necessarily but pretty good KT! I'll give you a ding ding ding! So here's the thing you need to understand.

Suze: It is probable that we're really at this point in time, in a great, great economy and all indications are that the market could absolutely continue up. So I don't want you to borrow from your employer 401k plan because remember any loan that you take from your employer,

Suze: if God forbid you lose your job, you have to quit or whatever usually is due and payable within that month. Now you have a Roth retirement account. So it really wouldn't be that bad. But I don't want you to take money out of a Roth retirement account right now. Given what is very possible to happen in the markets over the next year

Suze: now, maybe we're wrong and maybe it will go down. So with only about $7000 of credit card debt, I would much rather see you do a balance transfer at a 0% interest rate again if you have a good FICO score or contact NFCC.org N like in Nancy, F like in Francine, C like in Crazy, C like in cool.org and talk to them about possibly consolidating all of your credit card debt to a 0% interest rate. Pay them, they pay it off and there you go. But no, it's not a good idea to ever take money out of any retirement account to pay off. An unsecured debt. Got that. Ok.

KT: I picked the next one, Suze because this, this is from Rachel, Rachel, I think may be the perfect match for Joe, which is our first question of today's podcast.

Suze: Now, you're being a matchmaker?

KT: Yes, I am. You ready everybody? You tell me if I'm good with this one.

KT: Hi, Suze. I just finished my Excel spreadsheet that I used to document my spendings and savings overall. I saved 42% of my A G I

Suze: Adjusted gross income.

KT: Right. My problem is though, why doesn't it feel like I'm doing enough?

Suze: So, so you mean a good emotional match with the same problem because we don't know anybody's sexuality here? Ok. Go on KT

KT: Ready?

KT: My income is hourly and dependent on the number of hours. I work at the hospital. My goal has always been to be paid for an 80 hour pay period, but it isn't always possible largely due to burn out. I fear I'm developing an unhealthy relationship or view with my money or feel limited by it. And I don't like that feeling. I want to be happy knowing I'm doing what I know and the best that I can without sacrificing the fun of being young because getting old isn't always a guarantee.

Suze: Because she's a nurse and she sees... how old is she?

KT: She's 27. Joe was 39. I thought maybe they could talk to each other, Seriosuly.

Suze: You know, it's not a bad idea, KT. That somewhere we start a group,

KT: Like group therapy. He has financial fears like him. But what would you tell Rachel?

Suze: Well, there is a course, you know, that I have KT which is overcoming your fears and because fears, my dear Rachel about money, I'm going to tell you exactly the same thing I kind of said to Joe, which is if you feel like you have an unhealthy relationship with your money and money is simply a physical manifestation of who you are. What that says to me is that you have an unhealthy relationship with yourself. You know, I can relate to this because if you remember my story growing up, that the reason I thought my parents were so unhappy is because they didn't really have any money. And I really grew up believing, oh, if I just had money, I would be happy, I would feel great. Everything would be good. And then 1980 I'm hired by Merrill Lynch. And before you know it, I'm making $120 - 13000 a year and I'm still miserable.

Suze: So then the question was, well, if money isn't the key to happiness, what is? And that's when I started on this journey of having to look within to see why I am doing without happiness, even though I have money. So just maybe if you have what it takes to save 42% of your adjusted gross income, and you still feel that you have an unhealthy relationship with your money.

Suze: I want you to write down the things that you don't like about yourself, forget about money that you don't like about yourself.

Suze: Do you not like the fact that you're afraid to go out to eat once a week? Are you afraid to go on a vacation? What are you afraid about? And what don't you like about yourself? Then what I want you to do is just pick one of those things, one of them and I want you to do it.

Suze: I want you to try it. I want you to see how that feels and we can then go from there. You know, you might wanna take a look into my book, The Nine Steps To Financial Freedom and about Money Memories. Or again, the course that I just talked about that pretty much is on the women and Money app on the Suze shop there and go through those exercises and I can promise you you will uncover that the problem isn't with money isn't about the fear of money isn't about not getting appreciation about money.

Suze: It starts with not having appreciation of how really incredible you are.

Suze: Well, those were two interesting ones that you pick and to begin, those were like book ends. And, you know, we also talked about Philomena and her two boys, right? But as being a nurse and how she really wanted to help financially all these other nurses.

Suze: And then here we have Rachel who's also a nurse and who wants to work, work, work. So she can make more money. Or does she really want to work, work, work to help more people? Who knows? Right. But it's interesting that when you do work as a nurse and you see reality, the hard core reality of life every single day and how fragile it is, it sometimes shapes you with what you do and you don't do.

KT: She's 27 years old. She gets burned out.

Suze: Of course she does, right. But it's just to all of the nurses out there, we love you, we need you, we need you both KT and I can tell you we appreciate you more than you have any idea. Any idea. You've been my life savers many times too. And yeah, you did have to save KT as well for me. Right. Just keep doing your work. Keep loving who you are.

Suze: And I have no doubt that one day you'll always have more than you need financially to take care of yourself. So, until Sunday for another Suze School, there's only one thing that we want you to remember when it comes to your money.

Suze: And that is people first and again, that is on some level. Exactly what this podcast was about today. Self worth, self worth, self worth. Then what happens KT?

KT: Then money.

Suze: Then what happens? Then you have what it takes to buy things and all right. So until then you remain unstoppable.