Podcast Episode - Ask Suze Anything


401k, Car Buying, Debt, Divorce, Financial Advisor, Home Buying, IRA, Life Insurance


October 17, 2019

Listen to Podcast Episode:

In this Ask Suze Anything podcast, we hear questions from Women & Money listeners Tiffany, Chris, Nancy, Pamela, Kim, Mary, and Ann.


Podcast Transcript:

Welcome to another edition of Ask Suze Anything. This is where you write in your question, and if chosen, I answer it right here on the podcast. Want to be part of it? All you have to do is send in your question to AskSuzePodcast@gmail.com, S-U-Z-E. Soon you're going to be going to an app and asking your question there. But that's coming up, have I been telling you that that’s coming up for a while now? But I don't want to do it until it's absolutely perfect. All right, let's, go.The very first one is from Tiffany. She says, hi, Suze. I love your podcast, but your recent podcast prompted me to write in. You were telling a woman who is basically working around the clock, to love everything she does because it takes a lot less energy to love something than to be unhappy or hate your situation.Well, before I even go on with this email Tiffany, that wasn't what I said exactly. But OK, let's just continue. This is exactly what I needed to hear as I hate my current work situation. This is great, in theory, however though, you told us what we should do, you failed to tell us how to do it. How do you love something that you really hate? Thanks and keep up the great work you do, Tiffany.Tiffany, first of all, here's what I want to say. I love that you wrote in and I love that you heard something that you didn't understand totally and that you wrote to say that you didn't. Now, if you didn't understand it, that means that I didn't explain it good enough if you ask me. So, I just want to say something. It's not that I'm not saying that it takes a lot less energy to love. What I'm saying is that if you don't love every second of your day doing everything that you do, eventually it will destroy the time that you are putting into that. And time is known as the great destructor of all. So, for the woman that I was talking about, A.T. is how she likes to be referred to, isn't that she doesn't love her jobs. She loves what she's doing, she just hates that she has to do it.Do you see the difference there? She hates that she has to do it, and I was simply asking her to change that hate from hating that you have to do it, to love that you get to do it. Big difference than doing something that you hate. And the reason that she needs to love that she gets to do it, is because she is in an abusive relationship, and the only way for her to get out of that relationship is to have enough money saved so she can leave. So, she needs to love what she's doing and look at it like, oh, this is my ticket to my personal freedom. I love that I get to work one job, two jobs. I love the paychecks that I get because that's going to allow me to move out of the situation that I hate being in. I would never tell her to change the fact that she hates the situation that she's in, being abused, and love it. Do you understand the difference here?So, when you say you don't understand when I say how do you do that? How do you love something? I don't know. When you meet somebody and you fall in love, do you ask yourself, how do you fall in love with somebody? You either love something or you don't, you either like something or you don't. And you know when you're loving it, you know when you're liking it, and you know when you're hating it. So you, my dear Tiffany, if you are in a situation that you hate, then you need to love the fact that you are making money and can save up enough money so that you can move on to a situation that you love. That's the difference here. So just to be very clear, it's not about that it takes a lot less energy to love something than to be unhappy or hate your situation. You just need to be in situations that you love every single minute of. Is that possible to do? Oh, you bet it is.All right. Let's maybe go to a little bit lighter one here which is, hi, Suze. I'm working with the counselor from NFCC Organization. Now, before I go on again with this question, for those of you who don't know, www.NFCC.org is where you would go if you are in credit card debt, you can't get out, you don't know what to do. You're paying a really high-interest rate and nobody will lower your interest rate because you have a horrific credit score or FICO score. And so, then you go to what's called a debt management program www.NFCC.org, and you work with them. They work with the credit card companies to lower your interest rates. You pay them, they pay your credit cards and give you a four or five-year plan to get out of debt. Something all of you, if you need help to get out of debt, should absolutely look into it.So, Chris says, I'm working with a counselor from an NFCC Organization, and it got me thinking. I'm looking at $400 a month payment in student loans for the next 25 years and panicking about that. How do people manage that and buy homes and save for retirement, and buy cars, and live? Love the show, Chris, one of the men smart enough to listen.Chris, if you're smart enough to listen, then you're smart enough to understand that you're not always, hopefully, going to be making X amount of dollars per month. That's like me saying when I was a waitress and making $400 a month, how am I going to pay my bills? And now look at me. You have to assume that you went to school, you got a degree, and that you over the years, maybe not this year or next year, but definitely three years from now, five years from now, over the next 25 years, you will be making more money. You need to make more money as you get older, that is the plan, that's normally how it works. So, therefore, how do people manage that and buy homes and save for retirement and everything that you asked me? They manage it by these four words: They earn more and they spend less.Four really important words: They earn more and they spend less. They save more, they spend less. Whatever combination of those words you want. Maybe I need to make it six words: They earn more, they save more, they spend less. Well, that's kind of good, I like that. But you understand what I'm saying? So, do not get defeated here, do not think that this is going to be your situation for the next 25 years. No, this is your situation right now.Now, I go back to the very first question I just answered. You have to love this situation because if you hate the situation that you're in, when you hate something, when you feel defeated, you feel powerless. And when you feel powerless, guess what happens? The number one law of money kicks into place. When you're powerful, you attract people, people control money and therefore you attract money. When you are powerless, you repel people, since people control money, you repel money. You need money to be attracted to you right now. How do you get that to happen? By exuding a powerful energy. And you do that by loving what you're doing, understanding that if you don't love what you're doing, then find something that you love to do and start making money. Because when you are unhappy in what you're doing, you hate what you're doing, again, going back to the first question. What you do with the money that you make, is you waste it? You spent 40 hours a week doing something, and it's not paying you. So, you think you deserve to go out to eat, to go on vacation, to buy a new car, to buy new clothes, to buy a new iPhone, whatever it is. Because when you hate something, you rebel against it. And then you just go and you do something that makes you feel good temporarily until the bills come in again. So, this isn't your situation for the rest of your life, so don't treat it like it is,boyfriend.Nancy writes in and she says, Suze, I'm curious to hear your thoughts on financial advisors and managers that abuse their duties. I just saw the film Judy that was so upsetting on so many levels, to have been a star for 44 years and not know where the next meal is coming from was unbelievable. I realize the drug component is a big one here, but how do you personally double-check your own funds? Nancy, Nancy, Nancy, first of all, I saw the movie, Judy. May I just say that I think every single person should see that movie. The performance that Renée Zellweger, how do you even say her name? Zelwiggler? I don't know how you say your last name, but who cares? It was magnificent, she deserves an Academy Award. But you blamed the financial advisors. Did you hear how you started your email? Was it the financial advisors and managers? Or was it Judy herself who spent more? Maybe she wasn't listening to her advisors, but whether she was or she wasn't, or whether it was the advisors or not, that's not the point. You asked me, how do you do that? How do you manage it? And you manage it by opening up your own statements, getting honest with yourself, knowing how much you spend, how much you earn, how much you save. Do you have more money going out than you have coming in? I'll ask you a question. Do you know really how much money you spend every month? Do you know how much money you're saving every month? Do you know if what you're earning covers the expenses that you have? Because if you have credit card debt, I'm here to tell you you're spending more money than you have.And I know many, many famous people and I know their management companies and their bookkeeping and accountant companies. And I know that they tell some of these stars, don't spend this much money, you can't afford this, you can't do this. And they always say, oh, my income will continue, I'm a star, I can do this. So, don't be so rushed to blame financial managers that are abusive. Now they're out there, I can tell you that.You know, I'll never forget the time that Kathy Griffin, who's a very good friend of mine and more brilliant and more financially conscious than you have any idea, and she is so good to her mother, it is unbelievable. And she went on the Suze Orman show, she came on my show because we thought, what a great idea. This is when she had her show, you know, My Life on the D-List, and we thought we would tape both shows at once. So, she walks into my studio, sits down and has a pile of paperwork about 12 inches high, and she looked at me and said, tell me how I'm doing. Cameras are rolling, here we are, we're on and I'm going through one paper after another and I very shortly realize while we're into this process, that her manager is ripping her off.Now you have to remember that Kathy Griffin, right before this, had just divorced her husband, who also ripped her off of $78,000. And now here she goes and she finds a manager to manage her money. And I'm looking at this, I'm going, oh, my God! Her manager has put Kathy's house in his name, like, is this even possible? And I look at Kathy and I say, Kathy, do you have your phone with you? She said yes, she pulls out her phone. I said, please call your manager and put him on speaker. This is on TV, everybody, and she does so and I start firing one question, after another question, after another question at her manager. And it did not take long for Kathy to realize what her manager had done. And we ended up firing her manager, switching everything, and making it the way that it should be.So, here's a situation where, yes, Kathy was being ripped off by her manager. She had been ripped off by her husband, but Kathy is as smart as they come, and she just simply wasn't watching over it. So now she watches over it. There isn't a month that goes by, a day that goes by, that we don't look, KT and I, don't look at every single check that is written, that is paid out. No money goes out, or whatever, without our permission. We scour our statements every single month to make sure everything is how it should be, and it doesn't matter that I've been with this one person for over 20 years now, I still check. KT still checks. You know, we keep everything separate. And therefore, you asked me, how do you do it? You do it the same way that you make a shopping list when you go shopping. Assuming you make a shopping list, but you should, because if you don't, you go in and you buy all these things that you don't need. But you look at it, you go, here's what's in my refrigerator, here's what I want in my refrigerator. Here's what's in my house, here's what I want in my house, and you check it. The same is true with money. You need to look at it, and again, I go back to the very first question, and you need to love to do that.And because Judy didn't love to do that, she loved to perform (although sometimes she didn't), but she loved to perform. But she didn't love to look at how she was performing for her money, how it was performing. So, are you starting to understand that you have to love all aspects of making money? You have to love how you make it, you have to love when you get it, you have to love looking at it and watching over it. It's really, really important. So, it's not that heavy-duty of a question and don't be angry at the financial advisors. Don't be angry at anybody else other than yourself because if something goes wrong with your money, it's because you weren't watching over it. And I tell you all the time you have to watch over it like they were your children. I tried to make a funny little joke about it, but I don't think it's so funny. KT says, it's not so funny, Suze. I always say, you know you have to watch over Bill, Buck and Penny. Get it, those are kids' names, anyway, she doesn't think that's funny. But in the same way, you would never just give your kids to somebody you didn't really know and watch over them and check in on them all the time.Why do you do that with your financial children? So, Judy was in a situation where many stars, they just give their money to somebody and they hope for the best. But they do not check on it and hope will never be a financial plan. All right, can you imagine that I'm always this intense? It makes me kind of laugh at myself but that is beside the point.This one is from Pamela, and she says, with all due respect, Suze Orman, they don't make cars like they used to. You're lucky if your vehicle last as long as you tell everybody that you should keep a vehicle. I've had 10 recalls already on my newish vehicle. What does new-ish mean? Does newish mean that that you bought a used car, but that's new for you? Or did you buy a car that was brand new, and its still kind of new, but not really? But you go on to ask me, what do you do when you have this many recalls? I also have another issue, and it's that I live 30 plus miles from town and they don't offer loaner cars anymore. So, I end up losing, either way, taking a day or two off from work. I miss the old days when things lasted. Any suggestions?You know, Pamela, things really, cars really do last today for a while if you really take care of them and you didn't get a lemon. If I was in your situation and I had a car that was constantly being recalled, there are two things that I would be thinking about. How many more recalls could there possibly be? Maybe I'm at the end of it, and I should just stick with it if the car is operating every other way. So, you're saying there are recalls, but what you didn't say is that the car is breaking down, that the car is stalling on you, that you're constantly having to take it in because every day you have a problem with it. You're just simply saying that your car has been recalled 10 times, and they've recalled parts of your car to make sure that you don't break down and that you are safe. So, don't mix up the two.So, if this car wasn't having recalls, would it have broken down on you? Would you be OK? Did you like it? So, I particularly like cars that have great reputations. I love when somebody buys a car that they buy a new car for themselves, but one that is used. And if I were going to buy a used car, I would be looking at probably a Subaru or something that lasts a really long time. So, my suggestion is, if you have a lemon and this is going to continue, get rid of it now. Figure out something and get a new car, probably used, again, for you, and one that has a great reputation. But just don't think that because in your head they're not making cars like they used to, which may be true, that's not an excuse for not getting your car to last as long as you possibly can.This next one is from Kim, she says. hi, Suze. I'm a 51-year-old divorced woman who has a 17-year-old son, and I'm looking to get term life insurance but don't know what company to choose from and how long of a policy I should take out. Any advice would be great from you. I want the money to pay for my funeral expenses as well as to leave some money for my son. Kim, first of all, if I were you, I would go to a quoting service. A quoting service is a service where you put in your information about what you want, and then they come up with usually five quotes from term insurance policies and companies, and you just simply choose the cheapest one. My favorite quoting service is www.SelectQuote.com. That's where I would go, and again, I do not have any financial ties to them whatsoever. It's just that they are a company that was one of the very first companies, if not the first company, to create a quoting service. So, when you get a quote from them, that is the quote that you will pay. Many quoting services say, here is your policy, here's what it's going cost you. When you go to get it, they go, oh no, no, no, it's going to be more expensive. So, I happen to like them, but there are many others that are good. You can try out as many as you want and again get the cheapest one. A term insurance policy is good for a specific term period, and that term could be one year, five years, 10 years, 15 years, 20 years, 30 years, and at the end of that term, it goes away. At 51 years of age, you are still young enough that if you got a 10-year level term policy, which means that for 10 years your premium will be level, it will not go up. If you got a ten year or even a 15-year level term policy it would still be relatively very cheap. It could be $20 a month, $25 a month for you to be able to pay for your final expenses, as well as leave some money for your son. Ten years or 15 years from now, your son will be 27, he'll be 32. Hopefully by then, if anything happened to you, he would be fine and on his own.Now, when the term is up, you no longer have insurance. And the reason a term insurance policy is so cheap when you are younger like you are, is because they know actuarily speaking, you will not die within that term. So, they're just collecting money from you, and chances of you having a death benefit are almost nil. When you get older and they know you're going to die with the policy, that's when it is very expensive. So, while you have a term policy, this is the time that you also need to start setting money away so that in 10 or 15 years from now, the money that you have saved replaces the term insurance policy so you no longer need insurance. So, you my dear Kim, have to make the most out of these next 10 or 15 years. It's really just that simple. So that's what I would do if I were you.All right, let's just do two more. This one's easy. It says Suze, I'm in the process of doing a 401k rollover to a traditional IRA with Vanguard. When and how should I then convert the IRA to a Roth IRA? I am 52 this year. Thank you so much, Mary.Mary, it’s almost impossible for me to answer this question because number one, you told me your age, but you did not tell me how much money you are making. So here is a general rule for all who are interested in the answer to this question. Whenever you convert money from a traditional IRA or 401k to a Roth, whether you do it within your 401k, you're going from a traditional 401k to a Roth 401k, or you're going from a 401k to a traditional IRA rollover, and then you want to convert to a Roth. You need to understand money that has never been taxed, that is in a retirement account, when you convert it, it will be taxed to you as ordinary income in the year that you convert, and it will be added to your ordinary income that you are already making. So, it is possible that the amount of money that you are converting will put you in a higher income tax bracket and number one, you do not want that to happen.So, if you have money, for instance, that you are converting, there are two important factors. Only convert enough money each year so that it does not put you in a higher income tax bracket, number one. And number two, you need to know that you have enough years left so that after you converted, this money can grow and compound tax-free for you. So here we are, Mary is 52. Mary may not retire for 18 more years until she is 70, so she's fine converting little by little. However, if Mary wrote in and said she was 65, she's now going to retire next year, how much should she convert? I would tell her absolutely nothing. Nothing, especially if she also tells me that she needs to use this money for retirement. So, three things you need to take into consideration. Number one, what is your current income? Number two, how many years until you retire? And number three, do you need the money that is in this retirement account to generate income for you or are you just putting it in a situation where you are never going to need it and you're going to let it go down to your children or your beneficiaries?If you are in a situation where you're never going to need this money and you don't care about it, then all right, it doesn't even really matter how many years until you retire. Because then, little by little, you want to get it in there. But normally you do need this money, so you need to take in those three elements into account before you make any moves. Remember, it is better to do nothing than something you do not understand.Now, this next one is from Ann, and I saved this for last because, as you know, my biggest passion is financial abuse. I want to hear from you if you think you've been financially abused, you don't know if you've been financially abused, but you want to find out. And so many of you are writing me and saying, oh my God, Suze, you finally coined a phrase of what I am going through. Why is it that nobody has ever talked to me about financial abuse before? Well, I don't know, but we're sure talking about it now, so I just want to end with this last emailShe says, I was living with, then married to my husband, who was nice at first, for 38 years. I worked always full time. He was financially abusive. Most of my money went to raising my daughter, I paid for all of her needs, and I don't know where his went. But a lot was to alcohol and drugs I found out in our late fifties. He cleaned out bank accounts and life insurance policies, anything he could get, and then wanted more. I was isolated, and he became very strange, manipulative, scary, and greedy. He worked also but did not share. I tried to figure out what was going on. Eventually, he separated within the house, and when my daughter turned 18, he told me it was time to get a divorce. I was broken-hearted and outraged, but I got a lawyer. In a nutshell, I am now 60 and have to start over. What do I do? How do I start over? I don't have much after the divorce.Ann, you have a lot. You have courage, you have freedom. You lived within a situation that you knew what was going on. You felt it, you have been questioning it for all those years, and yet you stayed. The part about your email that broke my heart was when you say, I was brokenhearted after he told you he wanted a divorce. Do you understand that he did the biggest favor for you in life? That he did something that you did not have the courage to do, but you knew that you should. You didn't want to stay in that relationship, there is no way that you wanted to stay there. There is no way that you were happy and loving it there. You even refer to your daughter, and maybe it's the daughter between the two of you, as my daughter. And I always know when a married couple refers to one of the children as mine when it came from both, something is radically wrong. That is the first key. Now I do not know if that's the situation here or not, but I have a feeling that it may be. So, how do you start over? Girlfriend, you start over with gratitude. You start over with every single day saying this following prayer and write this down.May the sunrise, a supreme bliss, shimmer in every particle of the universe. So why not drink a fresh cup of joy every day and become inspired with new perceptions? Remember, love and respect must be renewed with each and every dawn. In providing answers neither Suze Orman Media nor Suze Orman is acting as a Certified Financial Planner, advisor, a Certified Financial Analyst, an economist, CPA, accountant, or lawyer. Neither Suze Orman Media nor Suze Orman makes any recommendations as to any specific securities or investments. All content is for informational and general purposes only and does not constitute financial, accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any loss, which may arise from accessing or reliance on the information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss or damages, direct or indirect, arising from use of the information. To find the right Credit Union for you, visit https://www.mycreditunion.gov/. Interested in Suze's Must Have Documents? Go to https://shop.suzeorman.com/checkout/cart/index/.

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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