Podcast Episode - Inflation Strikes Again


Bills, Social Security, Stock Market, Taxes


June 12, 2022

Listen to Podcast Episode:

On today’s podcast, Suze explains why the rising inflation rates means we have to be more careful with our spending. Conserving now will help us weather the storm, so we can be safe, strong, & secure.


Podcast Transcript:

00:00:32
MUSIC: (Music Intro)

00:00:33
Suze: June 12, 2022.

00:00:37
Suze: Good morning everybody. So

00:00:41
Suze: this morning I was sitting and talking to KT and she says to me Suze, are you gonna tell everybody what you said you were going to tell them about when we did Thursday's Ask Suze and KT anything show and I said

00:00:56
Suze: I don't know KT, I don't think so.

00:00:59
Suze: She goes why not?

00:01:01
Suze: And I said KT, Friday changed a lot.

00:01:05
Suze: It changed a lot for the future of all of us. And if I had talked about it on Thursday it would have made sense

00:01:15
Suze: for today. I want to talk about something else and she goes do you need my help? And I said KT I always love your help. But once again I'm just gonna do this one all by myself but she sends her love to all of you.

00:01:31
Suze: So what happened on Friday

00:01:34
Suze: that really concerns me.

00:01:37
Suze: What happened on Friday is once again

00:01:41
Suze: the C. P. I. Rate which stands for consumer price index

00:01:46
Suze: came out

00:01:49
Suze: At 8.6% which measures the rate of inflation.

00:01:54
Suze: And rather than going down like everybody else thought

00:01:59
Suze: it actually went up

00:02:01
Suze: now. If you've read any of the interviews that I've done lately or anything that I've talked about I've been telling you I want you to conserve I want you to be careful because inflation rules it dictates everything at this point in time.

00:02:19
Suze: And if inflation continues to go up

00:02:23
Suze: that means the stock market will continue to go down.

00:02:27
Suze: It means you pay more for absolutely everything.

00:02:33
Suze: Do you know that in California right now,

00:02:37
Suze: There are some gasoline stations that are charging $7.76 for a gallon of gasoline. The nation's average right now is $5 a gallon.

00:02:50
Suze: So we're up almost 100% from a year ago.

00:02:55
Suze: The cost of food, the cost of your airplane tickets, the cost of eating out, the cost of absolutely everything is going up, rent is going up, mortgage, interest rates are going up, everything is going up

00:03:13
Suze: and that has an effect

00:03:16
Suze: really on your future.

00:03:18
Suze: Because what I'm afraid of is a lot of you still have a little money around from whatever it may be or you have money

00:03:27
Suze: and you're just going along with these inflation increases like they mean absolutely nothing.

00:03:34
Suze: So what

00:03:35
Suze: if eggs have doubled, so what if I'm paying $5 a gallon, it doesn't matter

00:03:41
Suze: when you start to adopt that attitude,

00:03:44
Suze: then you're on the road of not valuing money for what money really is and what money can really do. And when you undervalue money, you also undervalue yourself

00:03:59
Suze: because as you know, I have this belief

00:04:02
Suze: that you and your money are one and what you do with your money, how you feel about your money, how you invest your money, how you waste your money

00:04:12
Suze: really represents,

00:04:15
Suze: how you feel about who you are

00:04:18
Suze: means you undervalue yourself, you undervalue your efforts because eventually for most households in the United States, it is going to catch up

00:04:29
Suze: The other day. I read an article that absolutely blew my mind, which was people who happened to be earning, taking home $250,000. One out of three of them

00:04:43
Suze: are living paycheck to paycheck.

00:04:47
Suze: Did you just hear that everybody,

00:04:49
Suze: one out of three taking home $250,000 a year

00:04:56
Suze: are living paycheck to paycheck.

00:04:59
Suze: Those taking home $50,000 a year, 80

00:05:04
Suze: are living paycheck to paycheck.

00:05:08
Suze: That is a lot of people.

00:05:12
Suze: But yet people just don't seem to be taking this seriously. So why am I taking this so seriously?

00:05:21
Suze: I'm taking this seriously and really KT and I are watching everything that we are buying the other day. She came in from the store here on the island, there's just a little market and she said Suze, do you know that a pineapple is $10?

00:05:39
Suze: And I said to her and did you buy it? She said no way! I would never spend that kind of money on a pineapple.

00:05:48
Suze: We value

00:05:49
Suze: every penny that we have.

00:05:52
Suze: We are not flippant with it.

00:05:54
Suze: We are not just, oh we have it. So we can spend it.

00:05:58
Suze: We worked really, really hard to have what we have. You have worked really, really hard to have what you have.

00:06:07
Suze: So you need to really take what's happening seriously

00:06:12
Suze: because little increases here, little increases there that you're not even noticing. Can really eat away at your savings while at the same time,

00:06:24
Suze: the stock market is absolutely eating away at your net worth that you have invested in the stock market.

00:06:33
Suze: The only thing that isn't being eaten away is real estate prices.

00:06:38
Suze: Those are staying just fine. There's still a demand there.

00:06:43
Suze: But the truth of the matter is, and you need to listen to me carefully on this one.

00:06:48
Suze: For the first time in history,

00:06:52
Suze: there are more people invested in the stock market than in real estate.

00:06:59
Suze: So what that means is that there are more people losing money right now, probably money they can't afford to lose.

00:07:08
Suze: Then they are invested in real estate. Now that is not me saying all of you should cash out and go invest in real estate. That is not going to be the point of today's podcast.

00:07:20
Suze: Today's podcast is another wake up call

00:07:24
Suze: a wake up call to, I feel like we're being nickel and dimed to death out there

00:07:30
Suze: and there really isn't,

00:07:32
Suze: in my opinion, a solution to it.

00:07:35
Suze: The other fear that I have is the fear of shortages

00:07:41
Suze: recently we just saw

00:07:43
Suze: have been able to buy milk for babies

00:07:47
Suze: was almost impossible to do formulas.

00:07:51
Suze: And what were those mothers and fathers going to do. There was nothing to buy,

00:07:58
Suze: I'm afraid shortly here and I don't know when that's going to be, There is going to be a dramatic shortage on food.

00:08:07
Suze: It has to be, you know, in the same way, I kept saying to all of you, be careful with this war. Oil has got to go up.

00:08:19
Suze: It's got to, we don't have enough oil to meet the demand. So when we don't have enough supply to meet demand and there's no answer for it. There's only one thing that can happen and that is the price of oil has to go up. And you have seen that happen

00:08:37
Suze: when you have a situation like we have in Ukraine

00:08:42
Suze: and Russia

00:08:43
Suze: which controls most of the wheat and the breadbasket, it's called of the world.

00:08:49
Suze: Eventually that has to trickle down where things start to show itself and we won't have enough food

00:08:58
Suze: so little by little.

00:09:01
Suze: Once again, we are going to see

00:09:04
Suze: that we have a shortage of things when there is a shortage of things, prices will continue to go up and up and up

00:09:13
Suze: now on Wednesday of this coming week,

00:09:17
Suze: the Feds once again will announce what they're going to do with short term interest rates.

00:09:25
Suze: Because as I've taught you in the past,

00:09:28
Suze: the way that the government, the way that the Feds

00:09:32
Suze: try to control inflation is they raise short term interest rates. And when interest rates go up,

00:09:40
Suze: it affects everything, the interest rates on mortgages which are now like 5 5.5% they possibly could continue to go up,

00:09:51
Suze: Treasury bills, bonds, and notes, interest rates can go up

00:09:55
Suze: the interest rates on your savings accounts, go up, the interest rates on your credit cards, go up. The interest rates on your home equity lines of credit go up

00:10:08
Suze: and when interest rates go up that tends to slow the economy because it costs you more to buy things if you have to finance it. So then you to start to not buy things that slows the economy which supposedly brings down inflation

00:10:28
Suze: so we'll see what happens. But the reason that you saw the stock market go down

00:10:35
Suze: last week,

00:10:36
Suze: especially on Friday

00:10:39
Suze: was because inflation came out at 8.6%

00:10:45
Suze: which was higher than what everybody, except me and many other people like me anticipated.

00:10:53
Suze: So

00:10:54
Suze: I want you to be careful here.

00:10:57
Suze: I want you to once again understand that when interest rates go up it truly affects technology stocks

00:11:06
Suze: that will continue most likely to go down. And even though they may seem like a bargain here

00:11:13
Suze: even though the E. T. Fs That focus on technology seem like a bargain here.

00:11:20
Suze: We are not done with this market going down

00:11:25
Suze: now. I said to you in the past few weeks we'll see possibly a bounce in the market which we did. I also said when it bounces you may decide if this is money that you can't afford to lose and you need right now, to come out. But if you have time on your side obviously 5 10 15 years or longer

00:11:44
Suze: just stay in, continue to dollar cost average.

00:11:48
Suze: There is some good news about this believe it or not

00:11:53
Suze: if you know what to do.

00:11:57
Suze: You know I was thinking about how it was June of 2021

00:12:04
Suze: That I first started talking about series I bonds when the interest rate was at 7.12%.

00:12:13
Suze: Now the interest rate is at 9.62

00:12:17
Suze: And inflation is still high. There's probably a really great chance that come November one when they set the rates again

00:12:27
Suze: It may reset at around the 9% level.

00:12:31
Suze: So again investments in I bonds are something you all should be looking into. All right.

00:12:38
Suze: However right now I want to talk about something

00:12:42
Suze: that I think is affecting a whole lot of the women and money community audience

00:12:49
Suze: and that is Social Security

00:12:52
Suze: so many of you and I'm so proud of this. I can't even tell you

00:12:57
Suze: are older that listen to this podcast,

00:13:00
Suze: you're collecting Social Security, you have retired

00:13:06
Suze: and now a lot of you are being really affected big time

00:13:11
Suze: big time by inflation

00:13:14
Suze: because you're normally on a fixed budget, a fixed income but yet your expenses are going up across the board.

00:13:25
Suze: So I want to talk to you about one piece of good news that I think you can expect in 2023

00:13:34
Suze: just like the consumer price index gives the average increase of a basket of goods that all of you buy.

00:13:42
Suze: There's something called this Consumer price index W. Or the C. P. I. W.

00:13:49
Suze: And this is an index that the Bureau of Labor Statistics normally referred to as the BLS

00:13:56
Suze: publishes every single month.

00:13:58
Suze: And the Consumer Price index W.

00:14:02
Suze: Stands for consumer price index for urban wage earners and clerical workers. And the reason that the C. P. I. W. Is very important for all of you on Social Security

00:14:17
Suze: is because this is the index, the figure that is used to adjust your Social Security benefit every year. Remember Social Security

00:14:28
Suze: has a cost of living adjustment cola every year. So as this index goes up

00:14:36
Suze: so does your Social Security check? However, normally even though your Social Security check goes up,

00:14:44
Suze: your Medicare premium

00:14:47
Suze: also goes up. So they usually cancel each other out

00:14:52
Suze: now

00:14:54
Suze: this month

00:14:55
Suze: The c. p. I. W. came out at 9.3%.

00:15:01
Suze: That is higher than anybody expected. And that's fabulous for those of you who are on social security because that means probably in 2023 your social security check will go up nine or 10%, maybe 8%. But right in there somewhere

00:15:21
Suze: now there's no way for us to know because they only really calculate it on what the C. P. I. W. Happens to be for July, August and September,

00:15:34
Suze: that's when they will figure it for your Social Security check that you will get January 1st. Okay,

00:15:42
Suze: but here is the good news

00:15:44
Suze: normally, even though you see your Social Security check go up by whatever cola happens to be. And I just recently said to you, your Medicare premium normally goes up as well. So it kind of cancels each other out for a variety of reasons.

00:16:02
Suze: Almost too complicated to explain right now. It is highly probable

00:16:07
Suze: that next year for the first time your Medicare premium will not go up

00:16:13
Suze: and in fact it may even be reduced

00:16:17
Suze: which means most of you are actually going to feel

00:16:22
Suze: like you are getting more money because if you get an extra nine or 10% on your social security check without it costing you more for Medicare that will help you somewhat with the inflation that's going on throughout the United States right now.

00:16:42
Suze: So that's good news for all of you. You know, I could go through this podcast and tell you everything that I really want you to know

00:16:53
Suze: but this morning for some reason

00:16:55
Suze: and I don't know why I did this. It was really, really early

00:16:59
Suze: And KT was actually still sleeping and I hand my little iPhone phone on in the bed next to her and I was going through just scrolling through all 373 episodes of the Women and Money podcast that I did before this one today.

00:17:19
Suze: And

00:17:20
Suze: I realized what an incredible wealth of information happens to be in those 373 episodes.

00:17:31
Suze: And that didn't surprise me but on some level I have to tell you it did. And then I realized

00:17:38
Suze: how are all of you

00:17:41
Suze: Really are you gonna go through all 373 episodes? Are you going to take the time to really look at which episodes could really help you the most during times that you may need it.

00:17:55
Suze: So then what I did is I jotted down the dates of the episodes

00:18:02
Suze: that I think will help you

00:18:05
Suze: during times like this.

00:18:08
Suze: And those episodes are on March 27th. I talked about how when the feds raise the short term interest rate, how that affects all of you. Great Suze School you should listen to it on April 17th. I did a master class on I bonds. So again if you haven't done I bonds yet you've got to listen to that on May 1st. I did a Suze School on how to get the most out of F. D. I. C. Insurance and N. C. U. A. Insurance if you're in credit unions. So if you want your money to be safe and sound and you want to put in more than 250,000 which is the usual limit that's insured.

00:18:55
Suze: I show you how to do that

00:18:57
Suze: On May 22

00:19:00
Suze: I did a podcast called conserve conserve conserve and why I want all of you and I wanted all of you to even start then to watch every penny that you are spending

00:19:13
Suze: On May 29

00:19:15
Suze: I did a Suze School on T bills, notes and bonds and investment that I'll talk about again in a little bit for all of you. So many of you have written in and said Suze can you do a Suze School on annuities? Well guess what everybody on June 20th in 2021 I gave you a master class, go and listen to that podcast

00:19:41
Suze: And one more podcast that I want to talk about. I did November 15 in 2020 which was on Medicare vs Medicare advantage. I am going absolutely berserk

00:19:58
Suze: every time I see Joe Namath on tv telling you how Medicare advantage is the way to go.

00:20:07
Suze: It is not it is not, it will be one of the biggest mistakes you ever make. And what scares me right now is because inflation is so rampant because everything is costing you more. You probably feel like oh if I just switched from Medicare to Medicare advantage I could save x amount of money

00:20:28
Suze: And that will help me and give me the same coverage. It will not, it will not, it will not. One thing that I also want to talk about right now that I didn't mention in that November 15 podcast and again I'm gearing this towards people who are on social security who have Medicare and who are really being affected the most

00:20:52
Suze: by inflation In my opinion,

00:20:55
Suze: here's what I want you to just understand,

00:20:58
Suze: Do you know that Medicare actually pays a monthly fee sometimes as high as $1,000 a month to these Medicare advantage, insurance companies for them to take you on rather than they having to pay for you.

00:21:17
Suze: And why do they do that? Because they know it will cost them less. Medicare knows it will cost them less to have you be on Medicare advantage

00:21:28
Suze: than if you were covered by Medicare.

00:21:31
Suze: And so therefore it is worth it to them. Now do you think that if it's worth Medicare to pay Medicare advantage companies for you to be part of Medicare advantage

00:21:44
Suze: That there isn't a great reason for you to stay with Medicare. Of course there is. So again the November 15 podcast in the year 2020 is something all of you really should listen to because if you make the mistake of transferring to Medicare advantage you cannot

00:22:05
Suze: automatically transfer back

00:22:07
Suze: to a Medicare supplement policy. Be very, very careful everybody.

00:22:14
Suze: So here again, I've given you so many podcasts and now I've given you the master list of where you can go to, you can write those states down or come back and listen to this podcast to know where to go when you want that information.

00:22:30
Suze: But in summary

00:22:32
Suze: we still have a lot of work to do to fix this problem of inflation

00:22:39
Suze: and if inflation does not get fixed

00:22:43
Suze: then what happens is the big problem of the stock market going down does not get fixed.

00:22:50
Suze: The problem of your expenses going up does not get fixed and eventually what happens is the economy starts to slow down. We go into recession, jobs are lost, things start to go wrong and we don't want that to happen. But there's a good probability that it will.

00:23:10
Suze: So the main thing I want you to know is that if you want to keep your money safe and sound

00:23:18
Suze: and there's nothing wrong with you wanting to keep your money safe and sound personally. And I think I've told you this before,

00:23:25
Suze: 50%

00:23:27
Suze: of what I have is safe and sound in either cash so that if I want to invest I can

00:23:35
Suze: or treasuries

00:23:37
Suze: Or bonds that I bought many years ago that are still giving me five and 6% tax free.

00:23:47
Suze: So

00:23:48
Suze: that's the majority of my money. Yes I have money in the stock market

00:23:53
Suze: but I have even more money waiting to when I think it's time to then start to reinvest and I personally don't think it's quite time yet.

00:24:04
Suze: Now I am older

00:24:07
Suze: and I am not looking for growth anymore of the money that I have.

00:24:12
Suze: I am simply looking for preservation of my money. I don't want to lose what I have. If you're younger

00:24:22
Suze: you're in your twenties thirties or forties even fifties, you're in a different situation. Most likely where you do want to see your money grow. So this is the time now that you continue to dollar cost average into stocks that make sense. What kind of stocks are those?

00:24:43
Suze: Those are currently still oil companies? Energy companies. And yes, maybe they took a little bit of a hit last week. But truthfully,

00:24:53
Suze: oil has nowhere to go right now. But up, I don't care what anybody says.

00:24:58
Suze: The war between Russia and Ukraine isn't going anywhere. Again, we have more of a demand on oil than supply. So oil companies, health care,

00:25:10
Suze: pharmaceuticals, possibly. There are companies and exchange traded funds out there

00:25:16
Suze: that give you good dividends right now that if you dollar cost average into over the long run, you will be fine. But you just have to, like I've said before, stay diversified and know what you are investing in. But for those of you who want to keep your money safe and sound,

00:25:37
Suze: You just want a good interest rate and it just, that's all you really care about on some level. Again, I will reiterate treasury bills and notes and eventually bonds will be the way for you to go. The ten-year treasury was at 3%.

00:25:56
Suze: Those are great interest rates. But I do think those interest rates will go higher. So one technique

00:26:04
Suze: that you might want to use with Treasury bills and notes as well as certificates of deposits, is to simply do a laddering technique.

00:26:16
Suze: So let me give you an example with certificates of deposits,

00:26:19
Suze: Let's say you have $50,000 to invest. You might want to put $10,000 in a one year c. d. 10,000 in a two year, 10,000 in a three year, 10,000 in a four year, 10,000 in a five year.

00:26:35
Suze: Therefore every year you have $10,000 coming due.

00:26:40
Suze: If interest rates go up after one year, you'll take that $10,000 and invest it again

00:26:47
Suze: In a five year c. d.

00:26:49
Suze: Which will again give you higher interest rates and you just keep rolling like that and you can do the exact same thing with Treasury bills and notes

00:27:01
Suze: if you wanted to, you could put money in a six month Treasury Bill, a one year Treasury Bill, a two year Treasury Note, maybe a five year Treasury Note, maybe even a 10 year Treasury note and just keep rolling like that.

00:27:18
Suze: So just take a look at the interest rates that you are being paid

00:27:25
Suze: personally. I don't think it pays to go out further than five years right now with anything

00:27:30
Suze: and for money that you want liquid

00:27:34
Suze: where you need it. It's savings. It's an emergency savings account

00:27:39
Suze: again, please don't go for the banks right now that are trying to get your money by offering you the 1% the one and a quarter percent. They're trying to do anything possible to get you

00:27:52
Suze: in times like this where you don't know where the economy is going to go and what's going to happen. You want to stay with really strong financial institutions

00:28:04
Suze: that are giving you a really great interest rate. But what the majority of those institutions are giving you

00:28:12
Suze: so you want to know that the company is safe and sound that you're dealing with and they're going to be there.

00:28:19
Suze: I again, feel fabulous about Alliant Credit Union.

00:28:24
Suze: They are paying you right now 0.75%. Also, if you do not have the ultimate opportunity savings account with them,

00:28:34
Suze: you might want to look into that. You would go to my alliant dot com

00:28:39
Suze: and the reason why you would want to do that is because if you didn't have a lot of money right now

00:28:45
Suze: And you simply were able to put in $100 a month

00:28:50
Suze: Every single month for 12 consecutive months after that you will get what as long as you have $1,200 in their $100 bonus. So you're making .75% on your money and the $100 bonus, you know that you would need like $18,000 or so or whatever it is

00:29:10
Suze: in a savings account all at once to earn that kind of money.

00:29:16
Suze: So all of you really check it out if you don't have it. And again, I wouldn't be surprised if a lot of you saw in the next few months. another sweepstakes being offered last year we offered

00:29:30
Suze: $20,000 of money for those of you who had the ultimate opportunity savings account you automatically were entered if you had that. So just something to think about. I'm sure we might do that again. But for total information on it, just listen to the end of this podcast that's coming up shortly here now to find out exactly how it works.

00:29:54
Suze: So, I know I just threw a whole lot at you and I don't even know how constructive that was.

00:30:01
Suze: But what I can hope that you got from this message is inflation is here to stay for some time.

00:30:10
Suze: The only way for you to combat inflation

00:30:15
Suze: is to

00:30:16
Suze: earn more,

00:30:18
Suze: save more, spend less. So that may mean that you have to take on additional jobs right now. It may mean that you have to sell your home that you have and downsize because you really don't need it. Not a bad thing to do right now.

00:30:36
Suze: It means that you have to make really, really wise decisions

00:30:42
Suze: and you need to conserve conserve conserve because this is not going to get any better for quite a while

00:30:52
Suze: in my opinion.

00:30:55
Suze: So, until next Thursday, when Ms Travis will join me again for Ask Suze and KT Anything, there's really only one thing

00:31:05
Suze: that matters when it comes to you and your money and what I want for every single one of you and that's for you to be safe.

00:31:12
Suze: Strong and secure. All right. See on Thursday. Bye bye. Now,

00:31:18
MUSIC: Music OUT


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