May 26, 2022
Listen to Podcast Episode:
On today’s edition Ask Suze & KT Anything, Suze answers questions about dividend paying stocks, student loans, what cost basis means, inheritance, store credit cards and so much more!
Suze: May 26, 2022. Hi everybody and welcome to
KT: the K. T. And Suze
Suze: Ask anything podcast Alright.
Suze: Two things that I want to say before we begin, which is tonight at 10 pm
Suze: Eastern time, I'm on Banfield, which is on the channel, Newsnation , the cable channel. So you might want to tune in and say yes,
KT: That's Ashleigh Banfield, right? I like her
Suze: I liker her so much. I like her, right. But also I want to say one other thing
Suze: Yesterday May 25
Suze: was the birthday of Carla Freed. And I just want to talk a little bit about Carla because you don't know Carla, but you know her in a very interesting way. Carla
Suze: has been with me now, writing with me, co writing with me being my really total support for how many years now, KT?
KT: I introduced you to Carla
Suze: But how many years ago was that?
KT: At least 18,
Suze: 18, 20 years ago. A long time ago.
Suze: And there has never been... and Carla. If you're listening to this,
Suze: I wish you the happiest of happy birthdays, which again everybody was yesterday. You have been such a gem in my life (KT: and me too.) Yeah. In both of our lives and in everybody's lives, who has ever read anything that I've produced
Suze: you in many ways, in my opinion, have been my backbone
Suze: and just so reliable and so incredible. So all of you listening to this right now, wish Carla the happiest birthday in your heart. Wish her health and happiness and great good fortune because she is just the most magnificent
Suze: a person that I know. What KT? What do you want to say?
KT: she has the biggest smile on her face, Carla, you're
KT: really you've been Suze's anchor for many, many years
KT: and we just appreciate
KT: everything about you. We love that you
KT: have such a
KT: command of the english language
KT: and makes Suze sound great all the time.
Suze: (Suze laughs) And we wish you health, we wish Monica health, we wish everybody in your family health and most of all know we all love you and again wish you a happy, happy birthday. All
Suze: right, KT, let's start.
KT: Okay, so this podcast, Suze, I have
KT: short but
KT: very important questions and the first one touched my
KT: heart. I think that I want everyone to know if you don't know what she's talking
KT: about. Just ask her
KT: because half the
KT: time I don't either.
Suze: They all know that.
Suze: That's why they love you so much
KT: Hi Susie, can you explain what a dividend paying stock
KT: is and how
KT: you make money on them?
KT: And it says,
KT: she says this is from
KT: Irene, she says
KT: sorry, I don't know much about stocks, but I'm learning through you
Suze: First of
Suze: all, Irene, you should never say, you're sorry.
Suze: That's almost as if that is a word that you should get out of your vocabulary when you are asking something that you don't know why should you know it? Whoever teaches it?
Suze: so seriously, it's fine.
Suze: Let's do a little mini school right now on dividend paying stocks.
Suze: Some stocks decide
Suze: to put all of their
Suze: earnings back into the company so they can grow
Suze: some stocks, decide you know what? We
Suze: have enough
Suze: earnings to not only continue to grow but to pay back some of those earnings to the shareholders, those people who own stocks
Suze: that return of money to you is known as a dividend.
Suze: It's the same
Suze: way when you put money in a savings account
Suze: and now you're making interest when you get money from a share of stock that you own, it's called a dividend dividends are paid every three months. Usually
KT: The next question Suze is from Brenda.
KT: She said Suze
KT: we own a home and a
KT: cabin. We can double
KT: our money with the
KT: prices of the cabin which have gone up so high. My husband and I have investments in oil and stocks that pay us dividends. There
KT: you go.
KT: Everybody dividends. The yearly cost of the cabin is about $15,000.
KT: We would love your
KT: input on selling it.
KT: It would give us more money to travel, Save and enjoy our retirement years. So Suze, what are your thoughts on that?
Suze: Girlfriend, y ou already know what you want to do with it. (KT: Just do it.) You already said. The key to what you just said there in your email question
Suze: was it would give us more money to
Suze: save and
Suze: enjoy our retirement
Suze: years. If
Suze: owning this cabin
Suze: doesn't give you that, you can double your money.
Suze: What the heck go for
KT: it. That's what I say.
Suze: All right,
KT: next question Suze
KT: is from Mary.
KT: Hi Suze,
KT: thank you so much for everything
KT: you do for so many people
KT: over so many
KT: You're getting old Suze when
KT: they say decades.
KT: You are a true treasure.
KT: My question is my
KT: Loans Alright. They are in default and in the six figures.
KT: I've been afraid
KT: to invest any money
KT: anywhere in fear of it being confiscated toward my student loans. Is that fear a reality?
KT: Could they touch her Roth IRA, her stocks, her dividends, her bonds etcetera.
KT: Tell her the truth, Suze.
Suze: Here's the thing, Mary.
Suze: If you
Suze: have money
Suze: to invest
Suze: in other things, why
Suze: are you not getting
Suze: your student loans
Suze: out of default?
Suze: Your student loans will continue to grow and grow and grow and follow you
Suze: and follow you seriously to your grave.
Suze: They will
Suze: dock your Social Security checks, you cannot get out of it and in most cases you cannot claim
Suze: So it's really important that
Suze: you face these loans
KT: How doe she do that?
Suze: She contacts her lender
Suze: KT. She gets them out of default.
Suze: You would put them on
Suze: an income based
Suze: program. That's what I
Suze: would be doing if I
Suze: were you and any
Suze: money that you were looking to put
Suze: towards savings, you
Suze: owe this money,
Suze: you have
Suze: to pay it. I have always said to all of you. Student loans are the most dangerous debt of all debt. Even more dangerous than I. R. S. Debt
Suze: that you can have. So
Suze: by simply
Suze: letting them stay in default you have this serious monkey on your back and it's strangling you. So
Suze: why do you want to do that to
Suze: yourself? So yeah you're taking money and you're investing in and you're saving it. But
Suze: you're afraid
Suze: that they're going
Suze: to be able to take that
Suze: money. Fear is the main internal obstacle to wealth.
Suze: How do you face your fear? By taking action? The action that I want you to take is contact your lenders,
Suze: these loans out of default. Go on the income based repayment method and start dealing with it. Now.
KT: Next question is from
KT: Carol. Suze this is the million
KT: dollar question.
KT: She said what
KT: safe investments
Suze: can I make now for
KT: my Roth and
KT: I've switched some of
KT: them into "MM"
KT: which is money market accounts
KT: while investments were going down where
KT: can I go to keep the principal safe
KT: and make a little
KT: interest or dividend oil stocks?
Suze: All right. I want to this is like the million
Suze: dollar question I want
Suze: to address the oil stocks right now are the energy stocks
Suze: that I've been recommending for almost two years at this point in time.
Suze: You have to remember that while they're still performing very well right now
Suze: if Russia all of a sudden stops going to war with Ukraine. If things change the oil stocks,
Suze: E. T. F. S will absolutely go down in value. So you
Suze: have got to watch
Suze: them very carefully. I do think that there's more of a chance that oil in itself will continue to go up because we have a shortage of it. We don't make enough of it and it's just something that I still like,
Suze: it is not like a certificate of deposit, it is not like a Series I bonds. It is not like a Treasury Bill bond or note, it is not like money in the Alliant Credit Union.
Suze: That is all money that is safe and sound. And no matter what happens in the United States, no matter what
Suze: happens worldwide,
Suze: is money
Suze: that nothing can happen to.
Suze: So there's a big
Suze: difference between that
Suze: and investing
Suze: in energy
Suze: stocks, energy E T. F. S and things
Suze: like that.
Suze: So you have to keep that
Suze: in mind. You
Suze: have to watch
Suze: investments that you
Suze: invest in safe
Suze: things. Like I just
Suze: said, you don't
Suze: have to watch because they do what they're supposed
Suze: to do. So if you're really looking
Suze: for safe investments within
Suze: retirement accounts,
Suze: there's nothing wrong
Suze: with getting certificates of deposits.
Suze: There's nothing wrong with asking
Suze: your broker
Suze: do they have
Suze: Treasury Bill bonds or notes?
Suze: Most of them do.
Suze: And you do
Suze: those types of things within
Suze: your retirement
Suze: accounts. If
Suze: You want to be 100% safe and
Suze: sound. All right KT...
KT: So everyone keep listening to
KT: Suze's podcast because you'll give them a little heads up
Suze: as much as I
Suze: can, as much as I can because things can happen overnight. Things can turn quickly very quickly. Everyone
KT: Okay. This is from Erin. Hi Suze
KT: and KT.
KT: When you inherit
KT: a home
KT: and qualify for
KT: a step up in cost basis.
KT: How is
KT: that new cost basis determined?
KT: Is it an immediate
KT: assessment? What if it's been years and you're not sure
KT: what it was valued at the time
KT: of inheritance?
Suze: KT, what's a step up in cost basis?
KT: Is this my quizzie? (Suze: No)
KT: that's when you um
KT: that's when you inherit a
KT: home and it
KT: qualifies for a step up in cost basis (Suze: you have no idea, right?)
KT: I kind of get an idea. Want me to guess?
KT: Alright. I step up in cost basis is
KT: is when you inherit a home
KT: and that and and you get to um
Suze: All right,
Suze: let me just do this
Suze: everybody, KT
Suze: Don't do it, KT. We only have a 30 minute podcast.
Suze: You're lying. (KT: Oh, I know it. But go ahead.) Tell everybody.
KT: (Suze: Don't lie on the podcast. What's the answer?) Okay, so if his, let's say his mom bought the house for 200,000 now, it's worth 500,000 on the market, but he inherits it. His actual payment or the cost basis is 200
KT: something like that. (Suze indicates this is the wrong answer) That's not it?
Suze: Do you see everybody?
KT: I was close.
Suze: You weren't even... alright.
KT: What's the step up in cost basis? I'm not a realtor.
KT: Go ahead and tell them,
Suze: a step up in
Suze: cost basis is we'll take KT's example
Suze: Mom owns a home.
Suze: She paid 200,000
Suze: four. It's now
Suze: Worth 500,000. She
Suze: dies. She leaves
Suze: it to her son.
Suze: new step up in
Suze: cost basis
Suze: Is what it's worth the day that she dies. (KT: Which is why I know you said 200,000, it's now worth 500,000.) If he turns around and he sells it right now,
Suze: he doesn't pay any income tax or capital gains tax on it because his basis
Suze: Is 500,000.
Suze: He sells it
Suze: for 500,000. No tax
KT: Okay. Knew it was an advantage.
Suze: All right, but let me answer this question. Again, a step up in basis is valued usually on the day of death,
Suze: Sometimes it could be
Suze: six months before death, but usually it's on the day of death. What is your stock portfolio valued on the day of death that you're inheriting? What is the house worth On the day of death? Now if you haven't done that
Suze: and it's years have gone by, you're going to have to find a way to go back to when
Suze: the person died. That you inherited the house from
Suze: and you're going to have to find an assessment of it or ask a realtor to help you.
Suze: But normally it's done right away. So I'm sorry that you've let it go so far. But that's what you need to do. All right,
KT: okay. Next question is
KT: from Lisette. Suze, What type of
KT: life insurance should
KT: I get for myself?
KT: I'm 54
KT: No Children. How much should
KT: I invest? Wait, I'm gonna
KT: answer this for
Suze: Hold on, Suze, do you have life insurance
KT: on me? (Suze: No) Do I have
KT: life insurance on you? (Suze: No) Okay, there's your
KT: answer, Lisette
KT: zero life insurance.
KT: You don't need it. You don't
KT: have Children.
KT: Don't get it.
Suze: All right now let me answer this question correctly. Alright...
KT: But that was right to the point.
Suze: No, it wasn't. Lisette.
Suze: Do you have anybody that is financially dependent upon you?
Suze: Is your mother still alive? Your father still alive? A friend that you're taking care of? Is anybody financially dependent upon you? It doesn't have to be Children.
Suze: It can be anybody. If the answer to that question is no, I don't.
Suze: You do not
Suze: need life insurance and you all better get this. Life insurance is not an investment.
Suze: So when you say, how much should I invest?
Suze: You can't use the word invest and life insurance in the same sentence. You only buy life insurance and the only type of life insurance in most cases you should ever
Suze: buy is
Suze: term insurance. That's good for a specific period of time.
Suze: Most people are not expected to die with life insurance because then it's too expensive. So whole life universal and variable life insurance, I do not like in almost 99.9% of the cases. So
Suze: if you
Suze: meet what I said, which is nobody is financially dependent on. You
Suze: don't you dare buy life insurance.
Suze: Do you understand the
Suze: difference between your answer and mine?
KT: Yea, yours was a little
KT: No, yours was, yours was
KT: a little more thorough, mine
KT: Got to the point,
KT: yours was thorough,
KT: but you're right. I don't know if she has people dependent
KT: upon her. So if she does then take a,
KT: you know, then consider what they need when you're gone.
Suze: Next question, do you understand what today's podcast is going to be like
Suze: all day? Can you believe
Suze: this? Everybody? And
KT: these are great questions and they're really short. This next question is from Sheldon,
KT: Suze, so glad you're not retired and still helping so many, including me. I'm 88 years old. I just lost a big chunk in the stock market. I was going to say like everyone else did. Sheldon, including me too.
KT: However, I own my home without a mortgage as per your advice
KT: and the value has significantly appreciated,
KT: Suze. If I have to begin taking money out of my home,
KT: what are my
KT: options? And what is the best one?
Suze: Ah Sheldon?
Suze: You know, First, I just want to
Suze: say something about
Suze: losing money in the stock market. All
Suze: of us got so
Suze: used to really over the past number of years to the market going up, up, up up, even if it went down like it did in 2018, it absolutely recovered when it went down in 2020. It seriously recovered
Suze: markets go up, markets go down. That has happened for years and years and years. So you haven't lost a large chunk until you sell, you have to remember that and if you're in good quality stocks, E. T. F. S. Mutual funds, you're diversified.
Suze: They will eventually come
Suze: now in your situation here though, really Sheldon, I don't want you to take money out of your house
Suze: because the two ways to take money out of your house is number one with a reverse mortgage, which I do not want you to do or a home equity line of credit, which you do not want to do when interest rates are going up. I would much rather see you if you need money
Suze: At the age of 88
Suze: that maybe you
Suze: do liquidate some of your stocks and that you use the money from there to actually start living on.
Suze: other thing that you
Suze: might want to consider
Suze: At the age of 88 with the utmost of respect to you is now is the time that you might want to consider to sell your home,
Suze: you might want to consider selling your home depending on your situation because as you get older you may need help.
Suze: You may need people to care for you.
Suze: Is this the
Suze: time when you are now healthy to go into an adult living facility.
Suze: They're really pretty fabulous. My mom did it, KT's mom did it. So it's something that you might want to consider but I would not use your home at this point in time as a bank account. If anything, I would either liquidate some stocks here, believe it or not
Suze: and use that cash
Suze: because these markets are not going to be going up for long periods of time. They may go up in bounces like for a week to maybe for a month or two, but then they may retrace and go right back down again. So I'd rather see you take it from your stocks than out of your home.
KT: Okay. Suze next
KT: question is from
Suze: KT. Before you go on.
Suze: I don't have any regrets that my mom went into an independent living facility. She loved it. Did your mom love
KT: it as well. Oh my
KT: goodness! So
KT: it's okay to sell your house.
KT: Sheldon, you you might be ready for
KT: some company
Suze: anyway, go on.
KT: Suze, the next question
KT: is from Miriam
KT: and the reason
KT: I picked this
KT: is not so
KT: much for your question but her
KT: email is retired
Suze: So can you
Suze: come cook for us.
KT: So Miriam, I don't know if you're a retired chef but
KT: if you are, I
KT: love cooking. Alright, ready. I am
KT: retired with
KT: very little savings.
KT: My house is
KT: paid off. I
KT: live on my social
KT: security check but
KT: I have about $5,000.
KT: It's gaining nothing in a savings
KT: wondering Suze
KT: if I could get better
KT: interest for the
KT: somewhere else?
Suze: Well, if I were
Suze: You and I had $5,000, I would
Suze: go to my Alliant dot com and let me tell you why
Suze: Because you very well could put in $3800 in one lump sum right now
Suze: And also add then $100 a month
Suze: For the next consecutive 12 months. And at the end of those 12 months you would get $100 bonus that would give you a higher interest rate than you are going to get anywhere. And currently Alliant is paying .60%
Suze: I have no
Suze: doubt that
Suze: shortly they
Suze: will raise interest rates.
Suze: Just stay tuned
Suze: now listen
Suze: to the end of this podcast
Suze: for you to get all the details in terms of how it actually works. But it's a fabulous thing to do and that's what I would be doing if
Suze: I were you again
Suze: to my
Suze: Alliant dot com.
KT: Alright. Yeah, but wait, let's tell them it's the ultimate opportunity savings account. Just look for Suze and you'll know you're there, the $100
Suze: bonus and you'll
Suze: learn more about that at
Suze: the end of this podcast
Suze: when it ends there's a whole
Suze: thing about
Suze: it really,
Suze: especially for amounts like
Suze: Fabulous. Fabulous. Alright
KT: okay. Next is from Gary. I like I have all these men lined up. Do any mutual funds have series I bonds end or Treasury notes and bills? If so, what are the best funds Suze? If not, how do you buy these without using a broker? I
KT: thought you would like
KT: that from Gary.
Suze: First of all.
Suze: No there are no mutual funds that you can buy that offer a series I bonds.
Suze: There are
Suze: other inflation investments known as tips. But I happen to tell you I don't
Suze: like tips that much. So I'm not
Suze: even going to talk about them
Suze: if I were you, I would go to Treasury direct dot gov and you can buy your series I bonds
Suze: right there.
Suze: No commission, no broker. And they are fabulous.
KT: So Suze, this is a question from James
KT: Are short term
KT: C. D. S paying around the same as a Treasury and would one be beneficial over the other?
Suze: No you can do either one. Which
Suze: Either one is easier
Suze: for you.
Suze: CD. S are issued by bank
Suze: certificates of
Suze: deposits protected. F. D.
Suze: I. C. insurance up to
Suze: I did a
Suze: podcast on it not so long ago. How
Suze: You could get more than 250,000
Suze: dollars of
Suze: F. D. I. C. Insurance.
Suze: If it's with a
Suze: bank or N. C. U. A.
Suze: Insurance if it's with the credit union Treasuries are guaranteed by the taxing authority of the United States government. You can go either way which either one is simpler for you.
KT: We have
KT: another man lined up here.
KT: This is from Mike.
Suze: Did you choose all men?
KT: No I didn't. I'm actually looking because you may have I have Chris I have Mike I have quite a few.
Suze: So you don't actually look at the names when you do it. You
Suze: look at the
Suze: subject. They look at the subject.
KT: Okay so
KT: Suze and KT
KT: you have said many
KT: times that the money we have in the stock market should be the money that we do not need for at least five years. Does this also apply to retirement funds? I have also heard that if you are in retirement and living off of your investments,
KT: you need to keep a portion of the funds in stocks to protect against inflation. Alright so I'm a little confused. Could you help clarify from me? This is Mike from California (Suze: was that you saying you were a little confused?) No, Mike said. I'm always confused but Mike's a little all right
Suze: So mike, here's the thing
Suze: you have money in a retirement account,
Suze: Not all the money in your retirement account you're going to be using in the next five
Suze: Years. So let's say you have 300,000
Suze: dollars in a retirement account
Suze: and let's. Say over
Suze: the next five years,
Suze: you really only
Suze: need to take
Suze: out $20,000
Suze: a year
Suze: from your retirement account?
Suze: That $20,000 should probably be in cash.
Suze: If you need it for the next five years then it would be $100,000 that you would want within your retirement account in cash or in a money-market fund. So at least it's earning interest,
Suze: the rest of the money could absolutely be invested in stocks for growth. Now you have to remember that stocks go up and stocks go down. So if all let's say all of your money is invested in stocks that's paying you a dividend.
Suze: And the dividend is actually more
Suze: than the income that you need from your retirement account. Then I don't have a problem with that money being all invested in stocks. But you also have to remember that stocks can cut their dividends any time they want
Suze: and you never know what can happen to you where you need more than the money that the stocks are paying you in dividends.
Suze: I would have a good cash reserve within my retirement account
Suze: And beyond that cash reserve, I would have it invested in dividend. Pain stocks. All right, KT. Okay,
KT: next question is
KT: from Miriam Hi Suze
KT: and KT, I inherited the property from a relative, it
KT: was left jointly to me and to other family members.
KT: What happens when
KT: one of the other two
KT: family members,
KT: I own
KT: it with passes
KT: Does their share automatically
KT: Get split between the two surviving
KT: Or do they need to say in their will,
KT: Who their
KT: share will go to
KT: any thing
KT: to be aware of in
KT: terms of taxes or other
KT: steps to protect
KT: any surviving
Suze: So Miriam, it depends on how you own title
Suze: to the house or the property that you inherited.
Suze: So all three of you inherited the property.
Suze: You either own it in joint tennancy with right of survivorship. Which means when one of you dies,
Suze: The surviving members of their joint tenancy inherits that property. It goes directly to them or you own it in tenants in common.
Suze: Which means it's all in your individual names and when one of you
Suze: then your survivors get it according to your trust or will.
Suze: And there's nothing anybody can do about that.
Suze: So the real key here is how do you own the property? What is the title? How does it read? What do you want to say KT?
KT: Which one would you recommend?
Suze: It depends.
KT: what is the easiest way?
Suze: No KT, it's you own
Suze: it. Let's say I leave you
Suze: this condo, even though it's yours,
Suze: alright? But let's just say I
Suze: leave you and your sister Lynn this condo, alright?
Suze: the two of
Suze: you want each other to own it outright, you
Suze: Would own it in joint tenancy with right of survivorship.
Suze: However, if Lynn
Suze: her Children to inherit her half of the condo.
Suze: She, you
Suze: would own it with her
Suze: in tenants in
Suze: common. And then how your trust reads decides where your half
Suze: goes when you
Suze: die. Her trust decides where her half goes when she dies. It's just that
Suze: simple KT.
Suze: You have one more and then your quizzie.
KT: This is pretty straightforward. This is from Evelyn. Good day, Suze. I have regular retail store credit cards and there's no activity on them. If I decide to close my cards, will this affect my credit score?
Suze: No close them. Close them
Suze: Did you know
Suze: that when you charge a lot on retail
Suze: credit cards and you carry a balance on them. It actually hurts your Fico score more than a regular credit card. And why is that? It's because the interest rates normally on retail credit cards are
Suze: so much higher
Suze: than what you could get on a
Suze: regular credit card.
Suze: Sometimes it's like well why are they doing that? Why don't
Suze: they have a regular credit card? So can
Suze: you just get rid of your retail credit cards.
Suze: Alright, are you ready? Miss Travis? Quizzie time is not only for KT. It is for all of you. And by the way, if you want to ask a question that hopefully KT will choose an answer on the podcast. Just write your question to ask Suze podcast at gmail dot com. Also, you can always go on to the women and money app. You can download it on apple apps or google play and ask your question there. Also, KT yesterday I
Suze: posted pictures of
Suze: you and me in your new garden planting.
KT: Everyone. This this whole weekend coming up, Memorial
KT: Day weekend.
KT: I will be planting, planting, planting.
Suze: And also we'll continue to
Suze: send pictures. All right,
Suze: the quizzie again is for everybody.
Suze: So KT just
Suze: take a second before you answer so everybody can think about it
Suze: because you're just so
Suze: quick on the draw.
Suze: She's trying to look at what the question is. She's looking over at the paper in front of me. Alright, I converted... this is from Lynn. N ot your sister.
Suze: I converted 25,000 to a Roth Ira in December 2021.
Suze: Now that Roth IRA is down to 21,000. Should I withdraw $10,000 from it
Suze: to put in a series I bonds. (KT: Why not?)
Suze: I not tell you to wait
Suze: with your answer? Did you not
Suze: hear me say
KT: Everyone knows the answer. It's a good idea.
KT: Why not?
KT: It's a good idea. Suze
KT: you love series
KT: I bonds
Suze: No, come on. Really? Is that your answer?
KT: It's a good idea.
Suze: (Gives the game show "wrong answer" sound)
KT: is that? What's wrong with that
Suze: First of all, Lynn, you did not tell us your age.
Suze: So if you withdraw money
Suze: from your Roth ira that you converted a year ago.
Suze: You very well May Owe a 10% penalty. You never know what can happen there.
KT: What, what month was it in
KT: Yeah, you're right.
Suze: So no. And here's the other thing. You do not take
Suze: money Miss Travis out of the stock market.
Suze: If the
Suze: market is down, if it's in a good quality
Suze: stock, E T. F. Or mutual funds
Suze: to put anywhere else. So no, she should absolutely not do that. Lynn. Do not do it. Do not do it. Don't do it. Oh God. All
Suze: of you should go
Suze: back by the way and
Suze: listen to the podcast on
Suze: the five year
Suze: rule to
Suze: that when you convert money
Suze: from a traditional
Suze: Ira to a
Suze: Roth IRA,
Suze: Your time clock
Suze: starts all
Suze: over again
Suze: and it has
Suze: Not met the five year rule,
Suze: KT. All right. So, what are you talking about?
KT: Well, see, I
KT: just jumped the
KT: gun because I know how much
KT: you like series I bonds. But
KT: look at the consequences.
KT: do it. Don't do it, Lynn.
Suze: All right, everybody. Oh God. So KT, you're not done yet. What are you taking your earphones out for?
KT: Because you're
KT: talking so loud yelling at me. It's hurting my ears.
KT: Alright, (KT: so whisper) KT, What do we want to tell everybody to do? What
KT: Oh, you're going to watch Suze on Ashley
Suze: on Banfield on
Suze: news nation at
Suze: 10 p.m.
Suze: East coast time. nine pm
Suze: Central Time. (KT: I' ll be sleeping).
Suze: I'll miss you.
KT: No, I'll be there. All right
KT: Want me to come on and say hi to everybody.
Suze: I don't think so, whatever. And we'll see what happens on
Suze: Sunday for Suze School.
Suze: Happy Memorial
Suze: Day weekend, everybody. But until Sunday,
Suze: there's only one thing that we
Suze: want you to remember when it
Suze: comes to your money. And what is it KT?
KT: Be safe,
KT: Strong, secure, everybody.
Suze: See you soon.
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.
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.