Podcast Episode - Ask Suze & KT Anything: Financial Infidelity


Children, Children And Money, Debt, Estate Planning, Family, Financial Advisor


August 24, 2023

Listen to Podcast Episode:

On this edition of Ask KT & Suze Anything, Suze answers questions about choosing the right financial advisor, helping grandchildren with debt, wills and more.


Podcast Transcript:

00:00:00

Intro/Outro: All right, Suze & KT. Are you ready for today's podcast? Yeah,

00:00:04

Intro/Outro: of course, we're ready because we are unstoppable. Yeah. Baby

00:00:12

Intro/Outro: Music (in).

00:00:34

Suze: August 24th. What year is a KT?

00:00:38

KT: That's not a hard question, 2023.

00:00:42

Suze: There's your ding, ding, ding, ding. That was your quizzie.

00:00:45

KT: I'm happy and sad at the same time.

00:00:47

KT: Well, I'm a little sad that summer is coming to an end, but I'm super happy that first weekend of September we are going on a trip. I can't wait.

00:00:59

Suze: All right. Well, since you mentioned it, tell everybody where we're going.

00:01:02

KT: Suze and I are going to Italy to a beautiful place on the Amalfi Coast

00:01:07

KT: to celebrate our nephew's wedding Yeah. And we're very, very excited about that. And then following that, we're going to head back to Spain, everybody to do the Camino with a very dear friend of ours. So I'm excited. We haven't traveled yet since COVID like really far.

00:01:28

Suze: Well, we really haven't. We haven't really, we, we did, we went to British Columbia.

00:01:33

KT: Yeah. But that's not like going to Europe. That was fishing. It's like still connected to America, right.

00:01:41

Suze: What are we gonna do for podcasts while we're gone? We're just gonna have to figure that one out. Anyway, maybe we should take a vacation.

00:01:49

KT: You know what, Suze? Maybe we should do one from Spain.

00:01:55

Suze: So, here's the thing. Everybody. Welcome to the Women and Money podcast...

00:02:00

KT: And everyone's smart enough to listen.

00:02:02

Suze: That's right. Ding, ding, ding your second ding. And this is the Ask KT and Suze edition. Now, if you want

00:02:13

Suze: us to answer your question, you have to send it to ask Suze Suze podcast at gmail dot com. But you have to make it short and you have to make it. So it catches KTs eyes because it's KT that chooses

00:02:32

Suze: the ones that we do. So if something about it she likes, we will answer it on this podcast. So.

00:02:40

KT: Ok, Suze, so first question today is from Christine greetings, Suze and KT. I hope this day brings you the joy your podcast brings me.

00:02:50

KT: I'm looking for your advice today. I want to help my 20 year old grandson build good credit. Wait, wait, don't, don't say that. Hold on. I can feel it. I'm a single 60 year old woman still working recently. Recently,

00:03:07

KT: I denied cosigning a car loan was for five years at $12,000 for my grandson. It was difficult to say no because he doesn't have anyone else in his life with credit good enough to do it or with enough money to loan him but I don't need or want a car payment. Should something go wrong? See, she already listens to you and knows about the, what ifs

00:03:33

KT: his credit isn't bad. It's just that there is no credit history. Two years ago, I had given him my old car for graduation which has blown a gasket and isn't drivable. The old car needs about $5000 in repair. So, Suze, I would like to loan him the money for the repair, but I struggle with his life choices

00:03:57

KT: and then she goes on to say that he's going in debt. He keeps a job. He doesn't love so that he can continue to live in dependence. So wait, wait, wait, would it be helpful? This is, this is the part that you, you need to give her some good strong advice or tough love. Would it be helpful for his credit if I were to put him on as a cosigner on my credit card? And if so, how could I minimize his charging limit?

00:04:24

KT: What other advice can you give him to build his credit? He can't get a loan to build credit without established credit.

00:04:34

Suze: So first of all, if you did put his name on your credit card as an authorized user, I would not tell him on any level that you did that.

00:04:46

Suze: So just because you add somebody's name onto your card to hopefully have your credit score help their credit score does not mean that you need to tell them and give them a card. It doesn't matter if they have a card, so therefore you can do that if you want, but you are not to give him a card.

00:05:10

Suze: There are many ways that you can build credit. One of them is with a secured credit card where you put a specific sum of money, sometimes $500 or $1000 that secures the credit on that card and that starts to build his credit. You said should you loan him the $5000 to fix up the old car? Why does he need a car? Why

00:05:40

Suze: number one, number two, if you're gonna do that, it's not gonna be a loan, it's gonna be a gift because if you loan him $5000 and he can't pay you back, it's really going to ruin your relationship in my opinion because every time you see him doing something in this lifestyle of his that you said you did not like

00:06:03

Suze: you're gonna say, but wait a minute, you're doing this when you still owe me the last payment on my $5000. So if you're going to do that,

00:06:13

Suze: then you have to look at it as a gift. Now if you want to gift your grandson $5000 to fix up a car because he needs a car. Ok.

00:06:25

Suze: Ok, you can do that but no loaning when you loan anybody money you are asking for trouble on some level. It's almost the same as cosigning for them because either way you're not gonna get the money back. I can tell you that in most cases. So Christine just be careful with him when you said you don't like his lifestyle. Also, KT just gave me your email that you sent him

00:06:55

Suze: and sometimes everybody, we don't read the entire email. KT doesn't because it's just long, lots of information, right? But you also say here he refuses to attend a two year community college, even though he got it free on A plus program,

00:07:14

Suze: he has two more years to use it. But I don't see any indication that he will. I think it's a big mistake to walk away from free education. You bet it is. So you may have a grandson that needs to learn the hard way. So bottom line here, I will not be giving him the $5000 and let him learn.

00:07:36

Suze: Yeah. But how can he build up? I told you with a secured credit card if he can't manage to get like $500 to open up a card and secure it, secure it with that $500. No way. Can he afford anything else? So, I don't know

00:07:52

Suze: just too many things in this email that I heard and I'm now reading that I really just don't like I just, if it were my grandson, even in our situation, KT given what I'm reading here. No way.

00:08:10

Suze: All right. Next, next question.

00:08:15

KT: And this, this one, I know how I would answer this and she asks for my...

00:08:18

Suze: Wait, wait, I just have to go back for a second. Right. Remember my saying, sometimes hurting is helping and helping is hurting.

00:08:28

Suze: That's the situation here. It's so hard, especially when you have the money to say no to somebody you love.

00:08:37

Suze: But sometimes when you say no, they start to say yes to the possibilities that they can create in their own lives. All right.

00:08:46

KT: And believe me, Suze, and I have said no, plenty of times. And we've said yes, too many times. Well, all right. Which is why we're not going to do that again. Ok. So from Andrea

00:08:59

KT: a question when looking for a new financial advisor a year ago, I took your advice and went with a gentleman at Schwab that charges 1% rather than a woman that I liked more. But her fees were 1.5.

00:09:14

Suze: Let's just stop here for one second. I did not advise her to go with an advisor at Schwab. I advise that you should never pay more than 1% for a fee. All right. Go on. Ok.

00:09:27

KT: So while he's a nice guy who presented us with a plan to reach our retirement goals, he just didn't give me a lot of confidence to go. Oh, wait a minute. Not with what he was planning. Just how he presented it. He just is not as direct and convincing as I would like.

00:09:47

KT: He seems a little too soft for her. So then she said, so why did she go to the woman and negotiate? Oh, wait, that's what I'm gonna recommend at the end when he don't tell me she went with him on when he reviewed the investments available with my Roth 401k. Exactly a year ago,

00:10:05

KT: he encouraged me to participate in a target date fund rather than choosing from a list of small mid and large cap funds with some real estate and international exposure. I knew that was not a good idea based on your dislike of them,

00:10:22

KT: Suze. But I went along with all of his suggestions just to give him a chance.

00:10:27

Suze: Wait, wait one second here. Wait, I'll let you continue. I'm sorry to keep interrupting you. Why in the world Andrea would you give him a chance when you already knew that he suggested for you to do something that you probably shouldn't have done.

00:10:44

Suze: You have now fallen into a typical of nice woman. Ok. I don't want to hurt your feelings. I'll give you a chance. You don't give people a chance with your money. You either like them or you don't, you trust yourself more than you trust others. You have got to listen to your gut

00:11:01

Suze: and you did not do that. And don't tell me you're still with him. Go on.

00:11:06

KT: Upon my request we met this year and I still have the same reservations with him. So he ended up, he ended up agreeing with me actually, you this year and said that we could have gone with a variety of ETFs instead of a target date fund. And then she, she writes the Suze told us that ages ago

00:11:27

KT: and then she said, is the expectation of a follow up email out of line. Am I expecting too much from a financial advisor? He always responds when I contact him, but I would like to see a more proactive direct approach, Susie, you always say that we are our own best financial advisors, but the fact is most of us don't have the time or expertise to investigate

00:11:54

KT: funds and, and she said, I make a lot of financial decisions and investments independently, but I'm looking for either assurance that I'm making the wise choices or dissuasion and other suggestions based on his experience, I don't have enough confidence to independently make some of these decisions myself. So then then here's the best part about this. KT I love not only Suze's input but yours as well.

00:12:23

KT: So we both are on the same page here. I have no idea why Andrea hasn't contacted the woman that she liked from the very get go and just negotiated a 1% fee. Sounds like she's got a considerable amount of money.

00:12:39

Suze: Andrea The problem isn't with your financial advisor. The problem is with you and you not willing to own the power to control your destiny. What do you mean that you don't have the time? What do you mean that you don't have what it takes to make these decisions? And you want confidence,

00:13:02

Suze: never ever had to do was take the money and dollar cost average into diversified ETFs. If that was the problem. Vtivo, Os py, whatever the ETF would have been QQQ to get technology in there, there were all ways that you could have done that, but rather you chose to pay somebody 1%

00:13:25

Suze: that you didn't have confidence in from the beginning. What is one of the laws of money? You are never to talk yourself into trusting anyone and you did simply to be nice simply to save half a percent.

00:13:40

Suze: And the truth of the matter is you could have just simply put them in your own ETFs that almost everybody chooses and you wouldn't have had to pay that 1% at all. Remember my law of money, people first, then money, then things. You put money in front of people. You liked that other woman,

00:14:04

Suze: but you put money in front of your choice here by going with somebody who only charged you 1%.

00:14:13

Suze: There are other people out there as well. The fact that you're still with him and the fact that you are asking me

00:14:21

Suze: the question and KT is it too much for you to expect an email or whatever. It isn't enough that you aren't expecting enough from yourself. Forget expecting anything from this person anymore. He is never going to give you what you need. You've done it now for a year or two. Now you have to do it yourself or find somebody else

00:14:47

Suze: excuses. You know, that's another reason KT that I did the podcast, you know, last Thursday I don't, did you even hear it? Right. Did you hear me say it? That there isn't an excuse big enough to keep you from being who you are meant to be that if you consider yourself an underdog, if you think you can't do it, you never ever will Andrea change your thoughts. Of course, you can do this

00:15:12

Suze: and it probably don't even need to go to. And if you feel like you can't, then put the majority of your money for now into a high yielding money market fund or whatever, you all should be making a good 4 4.5% on that

00:15:27

Suze: or T bills short term making a lot more than that five something percent. And just our dollar cost averaging little by little into these markets. Now, these markets again, I'm going to repeat,

00:15:43

Suze: have started to go down and they could very well go down for a little bit here. Maybe they'll turn around in September, maybe not, but just know as the markets go down, that's good for you because then your dollars buy more shares, the more shares you have in the end, the better off you will be all right.

00:16:07

KT: Wait, you have to tell her you should fire him right now.

00:16:11

Suze: Uh, you don't think she got that idea?

00:16:13

KT: Suze. Next question is a topic that I know

00:16:18

KT: really will make, um, make your, your blood boil for sure.

00:16:22

Suze: Do you want to tell me the name or no?

00:16:24

KT: No, no, no. We're gonna just keep, this is from a woman that is just really going through some difficult times right now.

00:16:34

KT: Dear Suze, I've recently discovered financial infidelity. Ready for this one.

00:16:42

Suze: What kind of mood were you in when you pick these?

00:16:44

KT: Well, I think that a lot of people listening, a lot of our listeners, especially our women out there have or hopefully will not experience this. So she, she goes on to tell us my husband

00:16:57

KT: has been taking out money from his credit cards, loans and even my credit card. I take responsibility for a portion of it having an authorized user on my credit card and not checking my credit report.

00:17:13

KT: I have put a block on the credit card that is in my name and removed him as an authorized user. He charged ready, Suze $26,000 in my name and even changed where the bills went. He got to the point where he couldn't borrow from his credit cards anymore and he started taking out loans.

00:17:37

KT: The only reason he has told me I think is because he went to his siblings and neither one of them would loan him money. He used the money. No, she's not telling us, I think to protect, is he? What is he? She's not telling us probably to protect the Children. So listen to this, he's racked up approximately $100,000 of debt. I will file for either a separation or divorce. I'm sure of that.

00:18:06

KT: I am taking some time to process everything, Suze. But unfortunately, his bill collectors are going to need this money from him. Our finances are co mingled and I am in the process of untangling all of that and creating my own checking account, et cetera. We are in a home together and all of our bills have up until now been paid from a joint account that is in trust.

00:18:33

KT: Wow. So it said there's long term care insurance on me other bills that are going to be big and I will struggle to pay them on my own. Should he claim bankruptcy? Should he get a consolidation loan? I feel like he should decide by the end of this month and not

00:18:50

KT: leave us in limbo. I ask because his financial problems mean the kids and I will have to cut back and probably will not be able to count on money coming in from him since he will owe all of his creditors. Then she said I've worked part time for 20 years. While raising the kids, they're 15 and 10

00:19:12

KT: and at least for the next school year I can work a lot while they're in school. In the meantime, I'm working as much as I can, putting that money in my own checking account. And I've made initial calls to bankruptcy lawyers and divorce attorney, but I'm not sure exactly what I should do. Then this is the dilemma Suze

00:19:32

KT: and, and I think a lot of listeners may have this problem as well. He could move out. But then I'm worried that he would be paying $1000 to a landlord when that money could be slowly paying off the credit card debt and any advice that you can give would be so appreciated.

00:19:50

Suze: Yeah, I was gonna say KT, I already know what I want to say. So you need to listen to me and you need to listen to me closely.

00:19:58

Suze: I'm so sorry this has happened, but I'm happy that you're taking responsibility for not having watched over it. I always say to people that you've had to have some feeling that something was going wrong. And sometimes we just don't like to see things that are right before our very eyes. If I were you, my very first move would be you have got to divorce him

00:20:26

Suze: and he needs to move out right now because you need to set a legal separation date and a divorce date because until then you will be financially responsible most likely for half of his debt, if not more. Because even if he opened up credit cards in his individual name

00:20:52

Suze: on the credit card application, it usually asks, are you married if he chooses? Yes, for that. It then goes on to say essentially that your spouse will be responsible for these debts that you incur. That's essentially what it says. So I get that you're worried that

00:21:17

Suze: he would be paying $1000 to somebody else. I'm worried that you even want him anywhere near you. I'm worried that you even want him near his Children. And I get that you want to protect them and you want them to think that their dad is whatever

00:21:36

Suze: I would want them to know exactly what their dad is so that they never get themselves in a situation like you're in where they happen to get married to somebody who does the exact same thing, but they go, well, moms stuck with it. Mom made it ok. No,

00:21:55

Suze: the reality is he literally ripped you off. He only told you because he had to, he did not tell you because he loved you. If he had loved you, he never would have done this in the beginning.

00:22:10

Suze: You even mentioned calling the police. So obviously you feel there was a crime done and yet you want to continue living with him so that he can pay the $1000. No, you will figure out a way to do this. I don't care how you figure that out. I know you have what it takes to do. So, but you need to divorce him and have him move out to tomorrow. Do you hear me

00:22:37

Suze: now? Unless you are afraid of physical abuse from him,

00:22:43

Suze: then maybe it's a little bit different story and we would go about it a different way, but I don't sense that's happening here because you don't mention it. So therefore you have got to be strong here and make the decisions that you should have made when you felt them most likely a long time ago. Yeah, sad. I think a lot of people

00:23:10

Suze: learn about their, but KT here's a situation where you've just had me do two emails, right? Both where the women knew

00:23:20

Suze: that it wasn't quite right

00:23:23

Suze: that they had that feeling, but they're gonna stick with it anyway. They have excuses. Don't make excuses for others. Do you hear me? Ladies? Don't make excuses for yourself, don't make excuses for others. Nobody needs to be excused from their actions. And if they need to be excused from their actions, you need to be excused from that relationship and you need to take the power and the actions to do so, you have to walk away.

00:23:52

KT: Ok. So the next question is from Stacey.

00:23:56

Suze: And this is your last one.

00:23:57

KT: All right. My father had a bank account with just his name on it and a will from 1995 that stated all monies and real property to be split evenly between my brother and myself. My dad remarried in 2003,

00:24:13

Suze: they bought a house together and they're both on the title. My father told my brother and I, that the house was to go to his wife and any money accounts were to go to us. I know the deed trumps the will, which it should. But does the wife have any claims to the savings accounts at the bank? With just his name on it?

00:24:34

Suze: It depends. Well, hold on, let me finish. Now. There's approximately 36,000 that we're planning to use to pay all of the funeral expenses, which will be about 14,000. That would leave us 22,000 is the will in effect for this balance to be split between my brother and me. It depends really stays in that

00:24:58

Suze: that did your father put on the bank accounts? Because you say in here that it's a will from 1995. I don't know when your father said that the money is gonna be split between you and your brother.

00:25:15

Suze: Was that at that point? Was that after they were married? Who knows when that was? But if your father did not put his wife's name on the account as pay on death to her, then the will will take precedent over it. However, because it's a will,

00:25:37

Suze: it will have to be probated. Now for this small amount of money it may in the eyes of probate, right? They may let you do a short procedure and then just give it to you when you present the will. However, the only way to find out is, was there a designated beneficiary on his savings account known as a pay on death account? And where he named his wife?

00:26:05

Suze: It would have been nice if he had named the two of you. So you didn't have to go through this. But I think you will be ok.

00:26:15

Suze: All right. So KT are you ready for a quizzie?

00:26:17

KT: I'm always ready for a quiz. I love quizzies. Everyone loves quizzes. We get them right every time, every single time.

00:26:26

Suze: All right. So this one is from Maria and it's got three or four questions to it. All right. First question. Can one of the persons named

00:26:39

Suze: in the living trust be named as the executor in the will as well? Yes or no?

00:26:47

Suze: There you go. Ding, ding, ding. There's no reason everybody, if you have an executor of your will, that that person can't be your trustee or successor, trustee of your living trust. Normally, by the way, you create your living trust and you are the trustee of your

00:27:05

Suze: trust and you name a successor trustee in case something happens to you next, can I stipulate within the revocable living trust that the real property is to be sold or rented as determined by the executor with the net proceeds being split between two individuals.

00:27:32

KT: Yes.

00:27:33

Suze: So the executor can do that within the trust.

00:27:37

KT: It said if you stipulate, if you stipulate that the executor can make that decision.

00:27:45

Suze: All right, that's your final answer?

00:27:52

Suze: A trust has a successor trustee. A will has an executor. OK. OK. OK. But you have to pay attention to the little things, the title of who gets the who, who's, who's empowered and who isn't right next. Can non titled

00:28:12

Suze: items such as tools, furniture, jewelry, et cetera be included in the revocable living trust in order to avoid probate court.

00:28:26

KT: That's a tough one because those lists are in the will.

00:28:30

KT: I I don't know how to answer that. I'm gonna say no because that is a list of itemized items that are designated maybe by that executor in the will.

00:28:42

Suze: Ding ding ding, right? You got that. Here's the thing. Everything that goes in a trust normally has a title.

00:28:51

Suze: Your house has a title, your bank account has a title, your credit union accounts have a title, your brokerage accounts have a title, your ira your retirement accounts cannot go in the trust, but they have designated beneficiaries where you designate who is to get that money.

00:29:13

Suze: Normally, what happens truthfully, the tools, the furniture, the things like that people just come and they take it. The executor usually just says so and so wanted you to have this hammer. So, and so wanted you to have this chair, whatever they do. We left our fishing lures to colo, we, we left the fishing poles,

00:29:40

Suze: all the equipment or, or to fix or to work with, with Colo. Right. But that's in our will. But still mainly the will dictates the other things and...

00:29:58

KT: Wait, except the fly rods. I just want to make sure in case Travis is listening, Travis, the fly rods go to you, especially the really good ones.

00:30:07

Suze: Oh, my God. Anyway, so normally you don't put certain things in a trust and those things are governed by the will, but mostly they're governed where you just really, because they're really not worth a lot

00:30:23

Suze: depending. Right. But usually they just get dispersed. Right. The last thing you want to have happen is where your house ends up in the will because then that has to go through probate. So, no, you wouldn't want to include those in your trust, in my opinion, but you should put them in your will. All right. KT you know what we're doing in just a few hours.

00:30:54

Suze: Come on. It's August 24th. What are we doing today? Where are we going?

00:30:59

KT: We're flying baby.

00:31:01

Suze: Where are we flying?

00:31:02

KT: Going back to Florida? We're getting ready for our big trip in a week. We're getting ready. We're packing and finding real clothes to wear and things like that.

00:31:14

Suze: All right. So until Sunday

00:31:19

Suze: there's really only one thing that we want you to say every single day. And what is that Miss Travis?

00:31:25

KT: Today wherever I go, I will create a more peaceful, joyful and loving world.

00:31:33

Suze: And if you do that and if you take the actions to own the power to control your destiny, I promise you you will be what? Unstoppable.

00:31:52

Intro/Outro: Music (out).


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Suze Orman Blog and Podcast Episodes

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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