August 10, 2023
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On this edition of Ask KT & Suze Anything, Suze answers questions about stock dividends, safety deposit boxes, ex-spouses on mortgages and more.
Intro / Outro: All right, Suze and KT. Are you ready for today's podcast? Yeah,
Intro / Outro: of course, we're ready because we are unstoppable. Yeah, baby
Intro / Outro: Music In.
KT: Hey, everybody. It's Thursday, August 10th, 2023. This is KT and I'm going to, I'm welcoming you to the Women and Money podcast and the Ask Suze Anything Women and Money podcast featuring KT on Thursdays. And we also want to invite everyone to listen.
Suze: All right, she tried to do that.
KT: I did. Only one introduction is in August 10th 2023. It's hot and steamy and we're here in the
KT: studio where it's nice and cool and Suze has and, and because, because when it's cool, you can't do that. We're broadcasting from a hot and steamy island, but it's cool in the studio and Suze
KT: is going to answer some very cool questions.
Suze: She wanted to start the podcast this morning. How do you think she did everybody? August 10th, 2023. Welcome everybody to the women and money. Smart enough to understand how smooth I am doing this. I'm good at this, Suze and KT here. And this is the Ask KT and Suze edition.
KT: You tell them how to send their questions in.
Suze: No, no, you tell them.
KT: Come on, you don't tell me no. Come on.
Suze: Oh, here she goes. Don't tell me, you don't even know that. No. Come on, KT. You don't even know how to tell them that you go to?
KT: what do you go to go to Ask Suze podcast podcast dot com...
Suze: At Gmail! Do you see, do you see everybody?
KT: All right. Ask Suze podcast at Gmail dot com. And, and if you really want your question answered in the subject line, say KT pick me.
Suze: Oh God.
KT: Ok. So I have some good one.
Suze: Of course you do.
KT: I'm starting with Sylvia. Ok. So Sylvia Sylvia wrote in, I think this is a very fair good question. Hi, Suze and KT.
KT: I have a quick question on stocks that do not pay dividends such as Tesla, Paypal, Meta, Amazon and Google. I own these and I'm wondering if I should be keeping them or investing in stocks that pay dividends.
Suze: How old is she?
Suze: She didn't say but, but Sylvia... Suze, I have some questions to add to this. How often do dividends get issued? Number one and number two, is there an average dividend percentage or amount that you should be looking for?
Suze: Is that your question that you would have written in? Oh, this is gonna be...
KT: I'm spicing up. Sylvia has great stocks that she said they don't pay, but of course they don't, why don't they KT because they're great stocks. Sylvia. Here's the other thing I read
KT: and I said, Suze, do my apples pay dividend. And she said some, sometimes. So do these, sometimes.
KT: Here's what, tell us about dividends...
Suze: First, let me talk about why do some stocks pay dividends and others do not. When a stock has just been issued,
Suze: it's still young and it wants to really grow. They often KT take their profits and they reinvest it back into the business so that they grow, they have money to grow and develop. So they usually don't pay dividends so they can maximize their growth.
Suze: Mature companies, companies that have been around for a while or whatever, it may be established companies with stable cash flow and limited growth opportunities because they've already grown so big may choose if they want to
Suze: distribute dividends and dividends simply are paid every quarter out of cash flow. And one of the reasons that companies pay dividends is they kind of reward their investors for being a part of them. A lot of people don't like companies that pay dividends because if a company pays a
Suze: dividend, then you have to pay tax on that dividend usually as ordinary income. But KT, she's going, what's wrong?
KT: What's wrong with extra money? Who cares? I'll pay taxes if you give me a dividend.
Suze: But KT you might not want to pay taxes on a dividend because dividends are usually taxed at ordinary income.
Suze: And if you're investing in the stock for pure growth, you don't care about the income, you're young, the stock is young, whatever it may be, you're better off to let them take that money and reinvest it in them. So that's why you asked, how old Sylvia was that.
KT: So let me ask you if Sylvia is 30 versus 50
KT: how would you answer?
Suze: No, here's what I would say. First of all, an answer to your question on Apple stock, which I know, I love my man. Yeah, we're learning Spanish and
Suze: yes, you eat apples. That's true. But apple pays a dividend of, what do you think? Does it pay or not? Sometimes you said no, it pays a dividend of a half a percent a year.
Suze: That's it because Apple is taking the majority of their money and reinvesting it and developing things and things like that. So Sylvia, these are incredible stocks Meta, Amazon, Google, whatever paypal we have to watch closely just so, you know, but if you're not in need of income,
Suze: then there's nothing wrong with these stocks as long as you keep an eye on them. So that's what I would tell you. It's hard for me to answer this because I don't know your individual situation.
KT: My part two,
Suze: What's your part two was?
KT: Is there an average dividend percentage? You just said Apple pays a point a half a percent...
Suze: when I go to buy a dividend stock at this point and I'm buying it for the dividend for income. KT,
Suze: I want to see it pay at least 4% or more. That's, but I'm doing it for the income. Not necessarily the growth, but there are fabulous companies out there that pay a high dividend and are
Suze: also great growth companies. So it really just depends. There's no straight across the board.
KT: Do they go up and down the dividend?
Suze: They can.
KT: So when you're gonna about to buy, what do you look for?
Suze: When I go KT to look for dividend paying companies..
Suze: So the two of us, yes. Right. I not only want a good dividend but I really want a company that also in the long run will go up in value. So I'm looking for at least a 4% dividend if not more.
Suze: And there are companies out there like pfizer and other companies that pay approximately 4.5% right now. So you can have your cake and eat it too. But, but Sylvia has some fabulous companies there. Great. Ok. Next question
Suze: I'm here ready.
KT: All right. Next question is just looked at me like I didn't know if you were done with the dividends.
Suze: I've spent enough time on this dividend.
KT: All right, next question is from Angie. So Angie said, Hi, Suze and KT. I appreciate all the great advice you give and the very detailed explanations on complex issues. I'm about to read this thinking, Angie has a complex issue. You ready?
KT: I have a question about...
Suze: She says she has a complex issue for her just because you may not think it's a complex issue.
KT: I don't think it's a complex issue for her either.
Suze: Well, she just said it was a complex issue.
KT: Hold on. I have a question about safety deposit boxes. I understand that gaining access to a safety deposit box after the owner's death can be quite challenging even when you are the trust executive.
KT: Now Angie says I live in Illinois. I'm the joint owner of a safety deposit box with my 90 year old dad, Angie. You're so lucky. You still have a daddy. I missed mine so much. Then he has a will. A trust and I am the executor.
KT: Will I have a problem gaining access to this after he passes legal documents are not in the box. I have them in a safe at home. But there are other important things that I will need to get after he passes. I understand some states will require a probate court to gain access to the box. Even if you're the joint owner.
KT: I know these boxes are not so popular anymore, but many elderly folks still have them. And I think the topic needs to be discussed and, and I agree with her. A lot of old folks still have safety boxes for, for years. But the thing Suze that I feel is a solution is he's alive. Ask him for the key or get a second key.
KT: You know what I mean? I mean, it's that simple. That's great.
Suze: What state did state say she was in?
Suze: I happen to know about this because Illinois has what's called the safety deposit box opening act. I, I could be wrong but I think that's true.
KT: Are you sure that's not like an entertainment opening act?
Suze: What, what did you eat this morning? All right. But, but I believe I could be wrong. You should all look this up. It states that you and certain people have the right to access the contents of a safety deposit
Suze: box. If you're the executor of the deceased person's estate or maybe you're a co owner like you are, maybe you're the spouse, the immediate family member. So I think in Illinois you will be ok. However, forget what state you live in.
Suze: The truth of the matter is. You should not keep a will and a trust by any means in a safety deposit box because you may have to show the bank or the entity where the box is that you are the executor or the trustee of the estate.
Suze: I would also do exactly what KT said. You have to make sure that your name is on the box as an owner or a co-owner. You should absolutely have a key and if something were to happen, I would immediately go and take everything out of that box seriously if I could. Now the other thing is this
Suze: what is in there that is so important that you need to get at.
Suze: I would, while your father is still alive, I would go down there, I would go down there with him. I would see what is in the box that you feel you need to have access to. Because I can't imagine besides a will and a trust what else would be in that box? Except maybe cash things like that. But go down there and say dad
Suze: and talk to him and if there is something in there that you really will need to get access to take it out, now get a fireproof box, keep it at your house and that's where it should be and just talk to him about it because in some states, oh, I'm telling you, it can be very, very tricky
Suze: and they are not my favorite thing to have on any level. Next question, KT.
KT: Ok. Next question. 25 married and seeking advice. I like this subject very much. Sabrina. Hi, Suze and KT. Can you help a younger generation?
KT: I know many of the listeners are older that you answer. But I'm 25. I've been listening religiously to your podcast since 2021
KT: and I haven't looked back. I like that, Sabrina. My husband and I are 25 years old. We bring in about 100 and 60,000 a year before taxes. With our full time jobs, we invest with our company matches, we max out our Roth IRAs every year. And now looking to invest in something to earn us some passive income.
KT: We thought about real estate. We have no idea where to begin or how, what would you suggest? No real estate, something else. We are lost. Our goal was, this is the best part. I don't know if I thought like that when I was 25 but our goal is to retire by the time we are 55 please help Sabrina. You're 25. You want to retire when you're 55. I got news for you.
KT: I'm... Suze and I are over 70 we never want to retire. All right. So what does she do for passive income or more income?
Suze: Well, I want to say something, KT the other day, I did an interview and it was for older people in the Colorado area. I think it was called Growing Boulder NPR. That's the name that will come out soon. I recorded it.
Suze: And the, the thing that I was telling Bill the interviewer is that
Suze: you never think that you're going to grow old. And when you grow old, you don't feel unless you're not healthy as if you've grown old. So here we are 72 and as you can tell this morning going on 12.
Suze: So it's fascinating that when you're young that you think 55 is old, you think that you're gonna want to retire and when you actually get there, you probably won't just something to think about. So, here's what I would say to you.
Suze: Even though you're maxing out your Roth Ira s, even though you're investing in your company match at your plan. The very first thing I would do is if you do have a company plan, I would invest beyond the match because you have extra income, obviously, because you're looking to do something else with it. And the greatest thing that you can have in your life
Suze: are assets that also don't take any money to keep
Suze: the thing about real estate that you have to understand. My dear Sabrina is, yes, you can make a ton of money in real estate, but you also need money to keep real estate. You need to pay for the absurd insurance cost that it takes right now, property taxes, maintenance, all these things. So it's not like real estate
Suze: is an investment that doesn't require other money to keep it. Also, real estate is an investment that takes time to sell. It costs to sell it. If you're looking at it as passive income, you're dependent on others who are renting from you to pay that rent. Real estate can be very, very complicated
Suze: when it comes to the stock market or investing like that.
Suze: It doesn't cost you anything to keep those investments normally doesn't really take any time to sell them.
Suze: So you say that you invest with your company up to the point of the match. No, if you have extra money, I want you to invest in your company's retirement plan up to the max that you are allowed to invest, which can be like 20 some odd $1000. So you need to do that. If they have a Roth retirement account where you work,
Suze: I would be putting money my new money, not, I wouldn't be converting the old money. I would be putting my new contributions into the Roth 401k there and then I would continue to accumulate money. I would either take advantage of these high interest rates, whether it's a money market fund, a CD at Alliant Union, the ultimate opportunity savings account at Alliant Credit Union, whatever it may be,
Suze: there are high interest rates in treasuries, everything for you to just keep saving and saving and saving money.
Suze: I also would be opening up an investment account at a brokerage firm and dollar cost averaging into a lot of these stocks that are so fabulous and I would hope that the markets go down over time so you could keep investing month in and month out and buy more shares. There are so many things that you can do passive
Suze: income also can come in the form of dividends of what I just talked about in an earlier email. It can also come in the form of interest on C DS and treasuries as well or money market accounts. So there are all kinds of ways. However, you can always do something. But once you've done it, it's already done.
Suze: So when it comes to real estate, you have to know more about it, you have to know about what real estate is doing in the area that you happen to live in all of that. So real estate is a lot harder decision truthfully than all the others. We welcome you my dear young to the women and money podcast as well as everybody smart enough to listen.
Suze: And it is true. KT this podcast really is more focused on those that are 50 60 70 80 90 years of age. And why is that?
Suze: That's because there's probably not another podcast in the world that is focusing on you as you get older. Everybody wants the Youngins. But the Youngins, if you listen to this podcast, you can sure learn a lot from the elders, right? Sabrina, good for you and your husband. I'm really proud of you. 25 years old, you're going to be great. Compounding is...
KT: Give her that little...
KT: wait, Suze, we are already give her, give her that little.
Suze: I think she knows. But my, my favorite thing is you start at 25 which you are, you put just $100 a month as you know, because you're already doing it in your Roth Ira. She's putting over 500 a month in the Roth. But if you just put $100 a month in a Roth Ira because I want everybody to be included in this example.
Suze: And you do so every single month for 40 years until you are 65 and you do it in a good index fund or slices of good growth stocks you will have with that 12% annual average rate of return, which is possible over 40 years, 1 million
Suze: million dollars. You wait just 10 years till you are 35. You think what difference can $100 a year, $100 a month, make $1200 a year, $12,000 over 10 years. So you wait till you're 35.
Suze: Do you know at the age of 65 you would have only $300,000 versus a million? Those 10 years cost you $700,000. Which is why Sabrina I'm telling you max out right now, your 401k max it because these are your compounding year and tell all your friends to do that too. Yeah. All right.
KT: Ready. Next question is from Mary Anne.
KT: Hi, KT and Suze. I purchased the must have documents last year but I was overwhelmed when I started the process. I have no close friends or a family of my own.
Suze: That's why she's overwhelmed. The must have documents themselves, you know, that are distributed by Hay House,
Suze: everybody. They're so easy. I can't even tell you.
KT: So this is her question. She said I finally made the decision and got the courage to ask my sister to be my executor. She's coming to visit for a couple of days and I'm hoping we can fill the forms out together.
KT: I was planning to add her also to my alliant account. So she would have access to pay for any necessary expenses on my behalf. And then she said, Suze, I'm realizing now I should simply give her power of attorney. I'm assuming there's a form for this as part of the must have document package
KT: would love to learn more about giving someone power of attorney. And if there's any pros or cons.
Suze: So that's what um must have documents there, there are four documents, five documents really in there all altogether. And one of them is a financial power of attorney
Suze: that in case you become incapacitated, whatever it may be, you've already named somebody that can help you do that. However, it is really far better for you. If you ever become incapacitated or you need somebody to help you within the trust of the must have documents
Suze: is an incapacity clause. So you would name your sister successor trustee in that trust and that truthfully is the best way for you to protect yourself. However,
Suze: here's what concerns me about this question. You say you have no close friends or family...
KT: Her own family, like of her own children.
Suze: Oh, is that what that means? Because her sisters, her family, she says family of my own. Oh, I got it. All right. So, because a sister is a family, you just need to know that whoever the person is
Suze: that you designate as successor trustee to take over. If you can't do it yourself or executor or you give them power of attorney is somebody that you can trust that loves you that will take care of you that will not really take advantage of the money and things like that. So just know
Suze: that and I'm sure this is the case but not always that your sister fits the bill. All right, KT.
KT: Ok. This next question is from Linda. She said, Suze, I have a pet care business and I listen to your podcast every day when I'm walking the dogs. I like that. So she said I'm divorced for 10 years
KT: at the time of my divorce. My ex-husband had to be on the mortgage so I could get a mortgage. So now she's saying I took all of my alimony in a lump sum and I bought a home today. It's worth half a million dollars. I only owe 65,000
KT: several years back. I removed him from the deed, but he's still on the mortgage. My mortgage is $850 a month. The question is I have a beneficiary that will get my home does the ex-husband have any rights to my home and then here's the clincher, so he still calls it his house.
KT: So she's asking simply will my beneficiary run into problems getting my home.
Suze: Pop quizzie, pop quizzie. That's a pop quizzie for you.
Suze: Ok, because I need you to know the answer to this.
KT: She's, you've got, I think you have to get him off the mortgage because having him on the mortgage, I think gives him the right to do things like take a equity line of, you know, a home equity line of credit or take money out or do things to stop the sale or the, I don't know. II I think that...
Suze: Is that your final answer?
KT: It's not really an answer. I'm kind of guessing that you have to get him off the mortgage.
Suze: So it doesn't matter. It's just that you are wrong.
KT: Wait, does it matter if he's on it or not? Oh, Suze, you're so bad.
Suze: Let me tell you why KT is saying I'm so bad. Is that I said ok, maybe that should be a quizzie as she was reading it and I said no, it's ok.
Suze: I don't want it to be your quizzie because I have another quizzie that I picked out for her. Then she was asking me all the questions about it as if it was going to be a quizzie. He has nothing to do with the payments. Who cares if he's on the mortgage anyway. So here's the point everybody good for you, Linda, if you really want to stick an X with something seriously have them on the mortgage
Suze: because they don't own the house. But if you were to stop paying that mortgage, it would ruin their credit rating just so, you know, and they would need to pay that mortgage legally even though they don't own the house. So as soon as you pay the house off, they have no claim to it. They can think they do. It has nothing to do with it. But the real
Suze: smart way to do something is to have them off the deed. But on the mortgage, the reverse of that is never find yourself in a situation like Linda's ex is in where you are on the mortgage, but you're not on the title that is so dangerous. I can't even tell you, KT, I think we have room for one more.
KT: I kind of like this one. Everybody. It's from Johnzelle . I like Johnzelle . I like the name Johnzelle . Right. Hi, Suze KT. I love your podcast and I appreciate the value you add to so many lives. I'm 31. I'm a therapist and a solo practice.
Suze: We have another youngin, yeah!
KT: I hate youngin... don't call them that.
Suze: What should I call them?
KT: I have another
KT: young, smart listener. Not a young, young is that makes you sound like you're 150 years old.
Suze: I can feel that way sometimes...
KT: Anyway, I'm 31. I'm a therapist in a solo practice. I started saving for retirement two years ago when my accountant mentioned the tax benefits of contributing to a SEP IRA.
KT: The question I have comes from what I've learned from you about a Roth IRA. My SEP IRA is not a Roth but has the tax benefit for my business. I'm contributing about 6500 annually to my se is it best to keep doing what I'm doing and putting money into my SEP or should I instead be putting money into the Roth? You can make this a quizzie. I would do, I get both. I do both.
KT: So anyway, trying to decide if a tax benefit to my business via a SEP IRA is better for me or if the tax benefits of a Roth IRA are better in the long run. The tax benefits of being able to withdraw money that has grown for at least 30 or 40 years since you're only 31 is better in a Roth IRA versus a SEP IRA?
Suze: It is so funny. KT that, that was the question that you asked because the quizzies that I had picked for you today was I make too much money to have a Roth IRA.
KT: My CPA told me the only way to have a Roth is to open a SEP IRA and then convert it to a Roth. Is that true?
Suze: All right. So now we have a situation in the question that you just asked me that we have this person who's 31 who has a SEP IRA
Suze: and can get a tax write off for it for the time. But maybe in bad years when she doesn't have a whole lot of income or whatever, it may be, she could then convert it to a Roth IRA and pay taxes on it then, but then it's in a Roth. So, is it true that that's the only way she can get money into a Roth retirement account?
KT: Why doesn't she just open a Roth?
Suze: She has a Roth. Right? Doesn't she say she has a Roth?
KT: No, she has a, she wondering if she should,
KT: if she's better off having the Roth Ira versus the.
Suze: So the, that answer to that question is really depends on her situation and her income. However, if all she's doing is depositing $6500 into a SEP IRA . I think you would be far better off putting it into a Roth Ira. Since that's the maximum you can put into a Roth Ira
Suze: as well. However, all of you need to know
Suze: that as of the year 2023 for the first time ever drum roll, there is now a Roth SEP IRA
Suze: So if you make up more money than the Roth minimum, you can now open this because you can put into up to 25% of your net income up to, I think it's $66,000. So, if you could have a Roth IRA and put more than $6500 into that go for it is what I would be doing. There you go. And then the answer to the quiz
Suze: is that you need to tell your CPA, that it's not the only way to get money into a Roth by converting from a SEP IRA since you can now have a Roth SEP IRA KT. That's it. Go on.
KT: Should I have one?
Suze: Should you have what?
KT: A SEP Roth IRA.
Suze: Actually. Yeah. You know what?
KT: Because I, yeah, because I make more money than the minimum.
Suze: You know what? I should have a SEP Roth.
KT: You should too, Suze. Oh my God.
KT: We just, let's do it, let's do it. OK? We're gonna, we're gonna wrap this up. We're gonna go open them right now. So
KT: wherever you go today, everybody, what are you gonna do? Wherever you go today? Wherever I go.
Suze: So you mixed it up...
KT: Because I'm excited about opening up my Roth Ira Ira.
Suze: We'll talk to the CPA about it. All right. Anyway, today, now there's really KT. See, this is quite the podcast today.
Suze: What we want to say to all of you is that we really only, there's really only one thing we want you to do every single day. And that is to say what KT?
KT: Wherever I go, whatever I do.
KT: Oh, open it up for me today today. Wherever I go, I will create a more loving, joyful. Well, I can do. You can change that threesome any way you want. Ready,
KT: loving, joyful and peace, peaceful world or peaceful, loving, joyful or loving, peaceful, joyful. You can mix and match by the way, everybody. As long as you do that you are going to be unstoppable.
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