Podcast Episode - Ask Suze & KT Anything: What Safe Investments Can I Make? - 366


Credit Cards, Family, Stocks, Student Loans


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!


Podcast Transcript:

00:00:32
Suze: May 26, 2022. Hi everybody and welcome to

00:00:38
KT: the K. T. And Suze

00:00:41
Suze: Ask anything podcast Alright.

00:00:45
Suze: Two things that I want to say before we begin, which is tonight at 10 pm

00:00:50
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,

00:01:01
KT: That's Ashleigh Banfield, right? I like her

00:01:02
Suze: I liker her so much. I like her, right. But also I want to say one other thing

00:01:07
Suze: Yesterday May 25

00:01:10
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

00:01:23
Suze: has been with me now, writing with me, co writing with me being my really total support for how many years now, KT?

00:01:33
KT: I introduced you to Carla

00:01:35
Suze: But how many years ago was that?

00:01:36
KT: At least 18,

00:01:38
Suze: 18, 20 years ago. A long time ago.

00:01:43
Suze: And there has never been... and Carla. If you're listening to this,

00:01:47
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

00:02:06
Suze: you in many ways, in my opinion, have been my backbone

00:02:10
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

00:02:28
Suze: a person that I know. What KT? What do you want to say?

00:02:33
KT: she has the biggest smile on her face, Carla, you're

00:02:35
KT: really you've been Suze's anchor for many, many years

00:02:39
KT: and we just appreciate

00:02:41
KT: everything about you. We love that you

00:02:44
KT: have such a

00:02:44
KT: brilliant

00:02:45
KT: command of the english language

00:02:47
KT: and makes Suze sound great all the time.

00:02:50
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

00:03:06
Suze: right, KT, let's start.

00:03:07
KT: Okay, so this podcast, Suze, I have

00:03:10
KT: very,

00:03:11
KT: very

00:03:12
KT: short but

00:03:13
KT: very important questions and the first one touched my

00:03:17
KT: heart. I think that I want everyone to know if you don't know what she's talking

00:03:22
KT: about. Just ask her

00:03:23
KT: because half the

00:03:24
KT: time I don't either.

00:03:26
Suze: They all know that.

00:03:28
Suze: That's why they love you so much

00:03:30
KT: Hi Susie, can you explain what a dividend paying stock

00:03:34
KT: is and how

00:03:35
KT: you make money on them?

00:03:37
KT: And it says,

00:03:38
KT: she says this is from

00:03:39
KT: Irene, she says

00:03:40
KT: sorry, I don't know much about stocks, but I'm learning through you

00:03:44
Suze: First of

00:03:45
Suze: all, Irene, you should never say, you're sorry.

00:03:49
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?

00:04:01
Suze: so seriously, it's fine.

00:04:04
Suze: Let's do a little mini school right now on dividend paying stocks.

00:04:09
Suze: Some stocks decide

00:04:11
Suze: to put all of their

00:04:12
Suze: earnings back into the company so they can grow

00:04:15
Suze: some stocks, decide you know what? We

00:04:19
Suze: have enough

00:04:19
Suze: earnings to not only continue to grow but to pay back some of those earnings to the shareholders, those people who own stocks

00:04:30
Suze: that return of money to you is known as a dividend.

00:04:36
Suze: It's the same

00:04:36
Suze: way when you put money in a savings account

00:04:40
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

00:04:53
KT: The next question Suze is from Brenda.

00:04:56
KT: She said Suze

00:04:57
KT: we own a home and a

00:04:58
KT: cabin. We can double

00:04:59
KT: our money with the

00:05:00
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

00:05:08
KT: you go.

00:05:09
KT: Everybody dividends. The yearly cost of the cabin is about $15,000.

00:05:15
KT: We would love your

00:05:16
KT: input on selling it.

00:05:18
KT: It would give us more money to travel, Save and enjoy our retirement years. So Suze, what are your thoughts on that?

00:05:25
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

00:05:34
Suze: was it would give us more money to

00:05:36
Suze: travel

00:05:37
Suze: save and

00:05:38
Suze: enjoy our retirement

00:05:39
Suze: years. If

00:05:40
Suze: owning this cabin

00:05:42
Suze: doesn't give you that, you can double your money.

00:05:46
Suze: What the heck go for

00:05:47
KT: it. That's what I say.

00:05:48
Suze: All right,

00:05:49
KT: next question Suze

00:05:50
KT: is from Mary.

00:05:51
KT: Hi Suze,

00:05:53
KT: thank you so much for everything

00:05:55
KT: you do for so many people

00:05:57
KT: over so many

00:05:58
KT: decades.

00:05:59
KT: You're getting old Suze when

00:06:01
KT: they say decades.

00:06:03
KT: Alright?

00:06:03
KT: You are a true treasure.

00:06:05
KT: My question is my

00:06:06
KT: student

00:06:07
KT: Loans Alright. They are in default and in the six figures.

00:06:12
Suze: Oh

00:06:13
KT: I've been afraid

00:06:14
KT: to invest any money

00:06:16
KT: anywhere in fear of it being confiscated toward my student loans. Is that fear a reality?

00:06:24
KT: Could they touch her Roth IRA, her stocks, her dividends, her bonds etcetera.

00:06:30
KT: Tell her the truth, Suze.

00:06:33
Suze: Here's the thing, Mary.

00:06:34
Suze: If you

00:06:34
Suze: have money

00:06:36
Suze: to invest

00:06:37
Suze: in other things, why

00:06:40
Suze: are you not getting

00:06:41
Suze: your student loans

00:06:42
Suze: out of default?

00:06:44
Suze: Your student loans will continue to grow and grow and grow and follow you

00:06:50
Suze: and follow you seriously to your grave.

00:06:53
Suze: They will

00:06:54
Suze: dock your Social Security checks, you cannot get out of it and in most cases you cannot claim

00:07:01
Suze: bankruptcy.

00:07:02
Suze: So it's really important that

00:07:04
Suze: you face these loans

00:07:06
Suze: now

00:07:08
KT: How doe she do that?

00:07:09
Suze: She contacts her lender

00:07:10
Suze: KT. She gets them out of default.

00:07:13
Suze: You would put them on

00:07:14
Suze: an income based

00:07:15
Suze: repayment

00:07:16
Suze: program. That's what I

00:07:18
Suze: would be doing if I

00:07:19
Suze: were you and any

00:07:20
Suze: money that you were looking to put

00:07:22
Suze: towards

00:07:23
Suze: retirement

00:07:23
Suze: towards savings, you

00:07:25
Suze: owe this money,

00:07:27
Suze: you have

00:07:28
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

00:07:38
Suze: that you can have. So

00:07:40
Suze: by simply

00:07:41
Suze: letting them stay in default you have this serious monkey on your back and it's strangling you. So

00:07:48
Suze: why do you want to do that to

00:07:50
Suze: yourself? So yeah you're taking money and you're investing in and you're saving it. But

00:07:54
Suze: you're afraid

00:07:56
Suze: that they're going

00:07:56
Suze: to be able to take that

00:07:57
Suze: money. Fear is the main internal obstacle to wealth.

00:08:01
Suze: How do you face your fear? By taking action? The action that I want you to take is contact your lenders,

00:08:07
Suze: get

00:08:08
Suze: these loans out of default. Go on the income based repayment method and start dealing with it. Now.

00:08:16
KT: Next question is from

00:08:17
KT: Carol. Suze this is the million

00:08:19
KT: dollar question.

00:08:20
KT: She said what

00:08:21
KT: safe investments

00:08:22
Suze: can I make now for

00:08:24
KT: my Roth and

00:08:25
KT: Ira

00:08:26
KT: accounts

00:08:27
KT: I've switched some of

00:08:28
KT: them into "MM"

00:08:30
KT: which is money market accounts

00:08:31
KT: while investments were going down where

00:08:34
KT: can I go to keep the principal safe

00:08:37
KT: and make a little

00:08:38
KT: interest or dividend oil stocks?

00:08:41
Suze: All right. I want to this is like the million

00:08:44
Suze: dollar question I want

00:08:45
Suze: to address the oil stocks right now are the energy stocks

00:08:49
Suze: that I've been recommending for almost two years at this point in time.

00:08:53
Suze: You have to remember that while they're still performing very well right now

00:09:00
Suze: if Russia all of a sudden stops going to war with Ukraine. If things change the oil stocks,

00:09:09
Suze: E. T. F. S will absolutely go down in value. So you

00:09:14
Suze: have got to watch

00:09:15
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,

00:09:29
Suze: but

00:09:29
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.

00:09:43
Suze: That is all money that is safe and sound. And no matter what happens in the United States, no matter what

00:09:50
Suze: happens worldwide,

00:09:52
Suze: that

00:09:52
Suze: is money

00:09:53
Suze: that nothing can happen to.

00:09:56
Suze: So there's a big

00:09:57
Suze: difference between that

00:09:59
Suze: and investing

00:10:00
Suze: in energy

00:10:02
Suze: stocks, energy E T. F. S and things

00:10:04
Suze: like that.

00:10:06
Suze: So you have to keep that

00:10:08
Suze: in mind. You

00:10:09
Suze: have to watch

00:10:10
Suze: investments

00:10:11
Suze: closely

00:10:13
Suze: investments that you

00:10:14
Suze: invest in safe

00:10:15
Suze: things. Like I just

00:10:16
Suze: said, you don't

00:10:17
Suze: have to watch because they do what they're supposed

00:10:20
Suze: to do. So if you're really looking

00:10:22
Suze: for safe investments within

00:10:24
Suze: your

00:10:25
Suze: retirement accounts,

00:10:26
Suze: there's nothing wrong

00:10:27
Suze: with getting certificates of deposits.

00:10:30
Suze: There's nothing wrong with asking

00:10:33
Suze: your broker

00:10:34
Suze: do they have

00:10:34
Suze: Treasury Bill bonds or notes?

00:10:36
Suze: Most of them do.

00:10:38
Suze: And you do

00:10:39
Suze: those types of things within

00:10:41
Suze: your retirement

00:10:42
Suze: accounts. If

00:10:43
Suze: You want to be 100% safe and

00:10:46
Suze: sound. All right KT...

00:10:48
KT: So everyone keep listening to

00:10:50
KT: Suze's podcast because you'll give them a little heads up

00:10:53
Suze: as much as I

00:10:54
Suze: can, as much as I can because things can happen overnight. Things can turn quickly very quickly. Everyone

00:11:02
KT: Okay. This is from Erin. Hi Suze

00:11:03
KT: and KT.

00:11:05
KT: When you inherit

00:11:06
KT: a home

00:11:06
KT: and qualify for

00:11:08
KT: a step up in cost basis.

00:11:09
KT: How is

00:11:10
KT: that new cost basis determined?

00:11:13
KT: Is it an immediate

00:11:14
KT: assessment? What if it's been years and you're not sure

00:11:18
KT: what it was valued at the time

00:11:20
KT: of inheritance?

00:11:22
Suze: KT, what's a step up in cost basis?

00:11:25
KT: Is this my quizzie? (Suze: No)

00:11:31
KT: that's when you um

00:11:34
KT: that's when you inherit a

00:11:35
KT: home and it

00:11:36
KT: qualifies for a step up in cost basis (Suze: you have no idea, right?)

00:11:42
KT: I kind of get an idea. Want me to guess?

00:11:44
Suze: Yes.

00:11:44
KT: Alright. I step up in cost basis is

00:11:48
KT: is when you inherit a home

00:11:51
KT: and that and and you get to um

00:11:54
Suze: All right,

00:11:55
Suze: let me just do this

00:11:56
Suze: everybody, KT

00:11:58
Suze: Don't do it, KT. We only have a 30 minute podcast.

00:12:03
Suze: You're lying. (KT: Oh, I know it. But go ahead.) Tell everybody.

00:12:07
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

00:12:26
KT: something like that. (Suze indicates this is the wrong answer) That's not it?

00:12:29
Suze: Okay.

00:12:29
Suze: Do you see everybody?

00:12:30
KT: I was close.

00:12:31
Suze: You weren't even... alright.

00:12:35
KT: What's the step up in cost basis? I'm not a realtor.

00:12:39
KT: Go ahead and tell them,

00:12:43
Suze: so

00:12:44
Suze: a step up in

00:12:45
Suze: cost basis is we'll take KT's example

00:12:48
Suze: here.

00:12:48
Suze: Mom owns a home.

00:12:50
Suze: She paid 200,000

00:12:51
Suze: four. It's now

00:12:52
Suze: Worth 500,000. She

00:12:55
Suze: dies. She leaves

00:12:56
Suze: it to her son.

00:12:59
Suze: His

00:12:59
Suze: new step up in

00:13:00
Suze: cost basis

00:13:01
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,

00:13:14
Suze: he doesn't pay any income tax or capital gains tax on it because his basis

00:13:19
Suze: Is 500,000.

00:13:20
Suze: He sells it

00:13:21
Suze: for 500,000. No tax

00:13:24
KT: Okay. Knew it was an advantage.

00:13:29
Suze: All right, but let me answer this question. Again, a step up in basis is valued usually on the day of death,

00:13:35
Suze: Sometimes it could be

00:13:36
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

00:13:50
Suze: and it's years have gone by, you're going to have to find a way to go back to when

00:13:56
Suze: the person died. That you inherited the house from

00:14:01
Suze: and you're going to have to find an assessment of it or ask a realtor to help you.

00:14:06
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,

00:14:15
KT: okay. Next question is

00:14:16
KT: from Lisette. Suze, What type of

00:14:19
KT: life insurance should

00:14:20
KT: I get for myself?

00:14:22
KT: I'm 54

00:14:23
KT: divorced.

00:14:24
KT: No Children. How much should

00:14:26
KT: I invest? Wait, I'm gonna

00:14:27
KT: answer this for

00:14:28
KT: everybody.

00:14:29
Suze: Hold on, Suze, do you have life insurance

00:14:32
KT: on me? (Suze: No) Do I have

00:14:33
KT: life insurance on you? (Suze: No) Okay, there's your

00:14:35
KT: answer, Lisette

00:14:36
KT: zero life insurance.

00:14:39
KT: You don't need it. You don't

00:14:41
KT: have Children.

00:14:42
KT: Don't get it.

00:14:43
Suze: All right now let me answer this question correctly. Alright...

00:14:48
KT: But that was right to the point.

00:14:50
Suze: No, it wasn't. Lisette.

00:14:52
Suze: Do you have anybody that is financially dependent upon you?

00:14:58
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.

00:15:12
Suze: It can be anybody. If the answer to that question is no, I don't.

00:15:16
Suze: You do not

00:15:17
Suze: need life insurance and you all better get this. Life insurance is not an investment.

00:15:24
Suze: So when you say, how much should I invest?

00:15:27
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

00:15:38
Suze: buy is

00:15:39
Suze: term insurance. That's good for a specific period of time.

00:15:43
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

00:15:59
Suze: if you

00:16:00
Suze: meet what I said, which is nobody is financially dependent on. You

00:16:04
Suze: don't you dare buy life insurance.

00:16:09
Suze: Do you understand the

00:16:10
Suze: difference between your answer and mine?

00:16:12
KT: Yea, yours was a little

00:16:13
KT: more

00:16:14
Suze: Boring.

00:16:17
KT: No, yours was, yours was

00:16:19
KT: a little more thorough, mine

00:16:22
KT: Got to the point,

00:16:24
KT: yours was thorough,

00:16:26
KT: but you're right. I don't know if she has people dependent

00:16:29
KT: upon her. So if she does then take a,

00:16:33
KT: you know, then consider what they need when you're gone.

00:16:40
Suze: Next question, do you understand what today's podcast is going to be like

00:16:41
Suze: all day? Can you believe

00:16:42
Suze: this? Everybody? And

00:16:43
KT: these are great questions and they're really short. This next question is from Sheldon,

00:16:49
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.

00:17:05
KT: However, I own my home without a mortgage as per your advice

00:17:09
KT: and the value has significantly appreciated,

00:17:14
KT: Suze. If I have to begin taking money out of my home,

00:17:18
KT: what are my

00:17:18
KT: options? And what is the best one?

00:17:21
Suze: Ah Sheldon?

00:17:23
Suze: You know, First, I just want to

00:17:25
Suze: say something about

00:17:26
Suze: losing money in the stock market. All

00:17:28
Suze: of us got so

00:17:29
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

00:17:43
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.

00:18:03
Suze: They will eventually come

00:18:04
Suze: back

00:18:05
Suze: now in your situation here though, really Sheldon, I don't want you to take money out of your house

00:18:13
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

00:18:32
Suze: At the age of 88

00:18:34
Suze: that maybe you

00:18:34
Suze: do liquidate some of your stocks and that you use the money from there to actually start living on.

00:18:43
Suze: The

00:18:43
Suze: other thing that you

00:18:44
Suze: might want to consider

00:18:46
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,

00:18:55
Suze: you might want to consider selling your home depending on your situation because as you get older you may need help.

00:19:04
Suze: You may need people to care for you.

00:19:06
Suze: Is this the

00:19:07
Suze: time when you are now healthy to go into an adult living facility.

00:19:12
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

00:19:32
Suze: and use that cash

00:19:33
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.

00:19:52
KT: Okay. Suze next

00:19:53
KT: question is from

00:19:54
Suze: KT. Before you go on.

00:19:56
Suze: I don't have any regrets that my mom went into an independent living facility. She loved it. Did your mom love

00:20:02
KT: it as well. Oh my

00:20:04
KT: goodness! So

00:20:05
KT: it's okay to sell your house.

00:20:06
KT: Sheldon, you you might be ready for

00:20:10
KT: some company

00:20:11
Suze: anyway, go on.

00:20:14
KT: Suze, the next question

00:20:15
KT: is from Miriam

00:20:16
KT: and the reason

00:20:17
KT: I picked this

00:20:18
KT: is not so

00:20:19
KT: much for your question but her

00:20:21
KT: email is retired

00:20:22
KT: chef.

00:20:23
Suze: So can you

00:20:24
Suze: come cook for us.

00:20:26
KT: So Miriam, I don't know if you're a retired chef but

00:20:29
KT: if you are, I

00:20:30
KT: love cooking. Alright, ready. I am

00:20:33
KT: retired with

00:20:33
KT: very little savings.

00:20:35
KT: My house is

00:20:36
KT: paid off. I

00:20:37
KT: live on my social

00:20:38
KT: security check but

00:20:40
KT: I have about $5,000.

00:20:42
KT: It's gaining nothing in a savings

00:20:45
KT: account.

00:20:46
KT: I'm

00:20:47
KT: wondering Suze

00:20:48
KT: if I could get better

00:20:49
KT: interest for the

00:20:50
KT: $5000

00:20:51
KT: somewhere else?

00:20:53
Suze: Well, if I were

00:20:54
Suze: You and I had $5,000, I would

00:20:58
KT: absolutely

00:21:00
Suze: go to my Alliant dot com and let me tell you why

00:21:06
Suze: Because you very well could put in $3800 in one lump sum right now

00:21:14
Suze: And also add then $100 a month

00:21:18
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%

00:21:38
Suze: but

00:21:38
Suze: I have no

00:21:38
Suze: doubt that

00:21:40
Suze: shortly they

00:21:40
Suze: will raise interest rates.

00:21:42
Suze: Just stay tuned

00:21:44
Suze: now listen

00:21:45
Suze: to the end of this podcast

00:21:47
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

00:21:57
Suze: I were you again

00:21:59
KT: go

00:21:59
Suze: to my

00:22:00
Suze: Alliant dot com.

00:22:02
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

00:22:10
Suze: bonus and you'll

00:22:11
Suze: learn more about that at

00:22:12
Suze: the end of this podcast

00:22:13
Suze: when it ends there's a whole

00:22:15
Suze: thing about

00:22:16
Suze: it really,

00:22:17
Suze: especially for amounts like

00:22:20
Suze: years.

00:22:20
Suze: Fabulous.

00:22:22
Suze: Fabulous.

00:22:22
Suze: Fabulous. Fabulous. Alright

00:22:25
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

00:22:44
KT: thought you would like

00:22:44
KT: that from Gary.

00:22:45
Suze: First of all.

00:22:47
Suze: No there are no mutual funds that you can buy that offer a series I bonds.

00:22:53
Suze: There are

00:22:53
Suze: other inflation investments known as tips. But I happen to tell you I don't

00:22:58
Suze: like tips that much. So I'm not

00:23:00
Suze: even going to talk about them

00:23:02
Suze: truthfully

00:23:03
Suze: if I were you, I would go to Treasury direct dot gov and you can buy your series I bonds

00:23:10
Suze: right there.

00:23:11
Suze: No commission, no broker. And they are fabulous.

00:23:16
KT: So Suze, this is a question from James

00:23:19
KT: Are short term

00:23:20
KT: C. D. S paying around the same as a Treasury and would one be beneficial over the other?

00:23:27
Suze: No you can do either one. Which

00:23:28
Suze: Either one is easier

00:23:29
Suze: for you.

00:23:30
Suze: CD. S are issued by bank

00:23:32
Suze: certificates of

00:23:33
Suze: deposits protected. F. D.

00:23:35
Suze: I. C. insurance up to

00:23:36
Suze: $250,000.

00:23:38
Suze: I did a

00:23:39
Suze: podcast on it not so long ago. How

00:23:41
Suze: You could get more than 250,000

00:23:43
Suze: dollars of

00:23:44
Suze: F. D. I. C. Insurance.

00:23:46
Suze: If it's with a

00:23:46
Suze: bank or N. C. U. A.

00:23:48
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.

00:23:58
KT: We have

00:23:59
KT: another man lined up here.

00:24:00
KT: This is from Mike.

00:24:01
Suze: Did you choose all men?

00:24:03
KT: No I didn't. I'm actually looking because you may have I have Chris I have Mike I have quite a few.

00:24:11
Suze: So you don't actually look at the names when you do it. You

00:24:13
Suze: look at the

00:24:14
Suze: subject. They look at the subject.

00:24:17
KT: Okay so

00:24:18
KT: Suze and KT

00:24:19
KT: Suze,

00:24:20
KT: you have said many

00:24:21
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,

00:24:38
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

00:24:57
Suze: So mike, here's the thing

00:24:59
Suze: you have money in a retirement account,

00:25:02
Suze: Not all the money in your retirement account you're going to be using in the next five

00:25:08
Suze: Years. So let's say you have 300,000

00:25:13
Suze: dollars in a retirement account

00:25:15
Suze: and let's. Say over

00:25:16
Suze: the next five years,

00:25:18
Suze: you really only

00:25:19
Suze: need to take

00:25:20
Suze: out $20,000

00:25:22
Suze: a year

00:25:23
Suze: from your retirement account?

00:25:26
Suze: That $20,000 should probably be in cash.

00:25:31
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,

00:25:45
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.

00:26:03
Suze: And the dividend is actually more

00:26:06
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

00:26:23
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.

00:26:32
Suze: So

00:26:33
Suze: I would have a good cash reserve within my retirement account

00:26:39
Suze: And beyond that cash reserve, I would have it invested in dividend. Pain stocks. All right, KT. Okay,

00:26:46
KT: next question is

00:26:47
KT: from Miriam Hi Suze

00:26:49
KT: and KT, I inherited the property from a relative, it

00:26:53
KT: was left jointly to me and to other family members.

00:26:58
KT: What happens when

00:26:59
KT: one of the other two

00:27:00
KT: family members,

00:27:02
KT: I own

00:27:02
KT: it with passes

00:27:03
KT: away.

00:27:04
KT: Does their share automatically

00:27:06
KT: Get split between the two surviving

00:27:09
KT: owners?

00:27:10
KT: Or do they need to say in their will,

00:27:13
KT: Who their

00:27:14
KT: share will go to

00:27:15
KT: any thing

00:27:16
KT: to be aware of in

00:27:17
KT: terms of taxes or other

00:27:19
KT: steps to protect

00:27:20
KT: any surviving

00:27:21
KT: owners.

00:27:22
Suze: So Miriam, it depends on how you own title

00:27:27
Suze: to the house or the property that you inherited.

00:27:31
Suze: So all three of you inherited the property.

00:27:34
Suze: You either own it in joint tennancy with right of survivorship. Which means when one of you dies,

00:27:42
Suze: The surviving members of their joint tenancy inherits that property. It goes directly to them or you own it in tenants in common.

00:27:53
Suze: Which means it's all in your individual names and when one of you

00:27:57
Suze: dies,

00:27:59
Suze: then your survivors get it according to your trust or will.

00:28:04
Suze: And there's nothing anybody can do about that.

00:28:07
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?

00:28:18
KT: Which one would you recommend?

00:28:19
Suze: It depends.

00:28:20
KT: what is the easiest way?

00:28:22
Suze: No KT, it's you own

00:28:25
Suze: it. Let's say I leave you

00:28:27
Suze: this condo, even though it's yours,

00:28:29
Suze: alright? But let's just say I

00:28:30
Suze: leave you and your sister Lynn this condo, alright?

00:28:35
Suze: If

00:28:36
Suze: the two of

00:28:37
Suze: you want each other to own it outright, you

00:28:40
Suze: Would own it in joint tenancy with right of survivorship.

00:28:43
Suze: However, if Lynn

00:28:45
Suze: wants

00:28:46
Suze: her Children to inherit her half of the condo.

00:28:50
Suze: She, you

00:28:51
Suze: would own it with her

00:28:52
Suze: in tenants in

00:28:53
Suze: common. And then how your trust reads decides where your half

00:28:57
Suze: goes when you

00:28:58
Suze: die. Her trust decides where her half goes when she dies. It's just that

00:29:04
Suze: simple KT.

00:29:05
Suze: You have one more and then your quizzie.

00:29:10
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?

00:29:25
Suze: No close them. Close them

00:29:26
Suze: sometimes.

00:29:27
Suze: Did you know

00:29:28
Suze: that when you charge a lot on retail

00:29:31
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

00:29:47
Suze: so much higher

00:29:49
Suze: than what you could get on a

00:29:50
Suze: regular credit card.

00:29:52
Suze: Sometimes it's like well why are they doing that? Why don't

00:29:55
Suze: they have a regular credit card? So can

00:29:57
Suze: you just get rid of your retail credit cards.

00:30:00
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

00:30:32
Suze: posted pictures of

00:30:34
Suze: you and me in your new garden planting.

00:30:39
KT: Everyone. This this whole weekend coming up, Memorial

00:30:41
KT: Day weekend.

00:30:42
KT: I will be planting, planting, planting.

00:30:44
Suze: And also we'll continue to

00:30:46
Suze: send pictures. All right,

00:30:48
Suze: the quizzie again is for everybody.

00:30:50
Suze: So KT just

00:30:51
Suze: take a second before you answer so everybody can think about it

00:30:57
Suze: because you're just so

00:30:58
Suze: quick on the draw.

00:30:59
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.

00:31:10
KT: Right.

00:31:11
Suze: I converted 25,000 to a Roth Ira in December 2021.

00:31:16
Suze: Now that Roth IRA is down to 21,000. Should I withdraw $10,000 from it

00:31:24
Suze: to put in a series I bonds. (KT: Why not?)

00:31:29
Suze: Did

00:31:29
Suze: I not tell you to wait

00:31:31
Suze: with your answer? Did you not

00:31:32
Suze: hear me say

00:31:33
Suze: wait.

00:31:37
KT: Everyone knows the answer. It's a good idea.

00:31:39
KT: Why not?

00:31:40
KT: It's a good idea. Suze

00:31:44
KT: you love series

00:31:45
KT: I bonds

00:31:47
Suze: No, come on. Really? Is that your answer?

00:31:49
KT: It's a good idea.

00:31:55
Suze: (Gives the game show "wrong answer" sound)

00:31:57
KT: Why

00:31:57
KT: is that? What's wrong with that

00:31:59
Suze: First of all, Lynn, you did not tell us your age.

00:32:03
Suze: So if you withdraw money

00:32:06
Suze: from your Roth ira that you converted a year ago.

00:32:11
Suze: You very well May Owe a 10% penalty. You never know what can happen there.

00:32:17
KT: What, what month was it in

00:32:18
KT: 2021?

00:32:19
Suze: December?

00:32:21
KT: Yeah, you're right.

00:32:23
Suze: Alright.

00:32:23
Suze: So no. And here's the other thing. You do not take

00:32:28
Suze: money Miss Travis out of the stock market.

00:32:32
Suze: If the

00:32:33
Suze: market is down, if it's in a good quality

00:32:36
Suze: stock, E T. F. Or mutual funds

00:32:39
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

00:32:53
Suze: of you should go

00:32:53
Suze: back by the way and

00:32:55
Suze: listen to the podcast on

00:32:57
Suze: the five year

00:32:58
Suze: rule to

00:32:59
Suze: understand

00:33:00
Suze: that when you convert money

00:33:03
Suze: from a traditional

00:33:04
Suze: Ira to a

00:33:06
Suze: Roth IRA,

00:33:07
Suze: Your time clock

00:33:08
Suze: starts all

00:33:09
Suze: over again

00:33:10
Suze: and it has

00:33:11
Suze: Not met the five year rule,

00:33:13
Suze: KT. All right. So, what are you talking about?

00:33:17
KT: Well, see, I

00:33:18
KT: just jumped the

00:33:19
KT: gun because I know how much

00:33:20
KT: you like series I bonds. But

00:33:22
KT: look at the consequences.

00:33:25
KT: Don't

00:33:26
KT: do it. Don't do it, Lynn.

00:33:30
Suze: All right, everybody. Oh God. So KT, you're not done yet. What are you taking your earphones out for?

00:33:36
KT: Because you're

00:33:37
KT: talking so loud yelling at me. It's hurting my ears.

00:33:42
KT: Alright, (KT: so whisper) KT, What do we want to tell everybody to do? What

00:33:49
Suze: tonight?

00:33:49
KT: Oh, you're going to watch Suze on Ashley

00:33:52
Suze: on Banfield on

00:33:54
Suze: news nation at

00:33:55
Suze: 10 p.m.

00:33:55
Suze: East coast time. nine pm

00:33:58
Suze: Central Time. (KT: I' ll be sleeping).

00:34:01
Suze: I'll miss you.

00:34:03
KT: No, I'll be there. All right

00:34:07
KT: Want me to come on and say hi to everybody.

00:34:12
Suze: I don't think so, whatever. And we'll see what happens on

00:34:14
Suze: Sunday for Suze School.

00:34:16
Suze: Happy Memorial

00:34:18
Suze: Day weekend, everybody. But until Sunday,

00:34:21
Suze: there's only one thing that we

00:34:22
Suze: want you to remember when it

00:34:23
Suze: comes to your money. And what is it KT?

00:34:25
KT: Be safe,

00:34:27
KT: Strong, secure, everybody.

00:34:30
Suze: See you soon.

00:34:31
KT: Bye.

Suze's Financial Strength Test

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.

I have checked all the beneficiaries of every investment account and insurance policy within the past year.

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.

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