Podcast Episode - Suze School: Who Would You Give Your Life For?

Suze shares a heartbreaking story from a listener and recent widower, named Peter.  This story opens up a number of questions: How involved are you and your entire family in finances?  Have you thought through all possible scenarios to insure your financial security after your partner passes?  Are you sure your children will help you, if you need it?  Suze’s advice in this episode could help you avoid making a serious mistake.

Listen to Podcast Episode:

Podcast Transcript:

August 25th 2024. Welcome everybody to the Women and Money podcast as well as everybody smart enough to listen. Today is Suzie School usually.

But today it's a different type of Suze School because I want to be able to pass on a lesson through a Suze story.

And it's a story from an email that was sent to the Women and Money podcast a few months ago.

And I think it's important that sometimes we can learn from other people's experiences and their experiences in their own words, sometimes are more relatable, believe it or not than when I just tell you certain things. So we will be doing that in a second.

However, you have to say that this was a fabulous last week in the stock market and mainly on Friday, you saw the stock market if you watch, hopefully you don't. But if you did watch, you saw that J Powell, better known as Jerome H Powell, the chair of the Federal Reserve, which is the central banking system of the United States. You should all know that he was in Jackson Hole and Jackson Hole is where all these big wigs go and they all discuss money and announcements are made that affect the entire economy in many cases. And now Jay Powell finally for the first time, told everybody that it is going to be the time when they're going to start actually reducing the fed funds rate.

And for those of you who may not know the fed funds rate is this interest rate that very simply put, as it goes down, the interest rates on your credit cards, car loans and things like that also go down. But what also goes down is the interest rate on your savings accounts, treasuries and things like that.

But that is something that all of us have been saying you have to lower interest rates. They've been too high for too long. And now he's finally ready with his entire committee ready to do it. And the first one most likely will be in September.

So we'll see what happens. But that goes back to me telling you, you need to understand that the interest rates that you're currently experiencing in short term T bills or CDs, or money market accounts or funds aren't going to last, they are going to go down, which is why I have been encouraging you to go longer term and lock in those maturities do not go short term. But have you listened to me? Some of you have, some of you haven't remember me telling you about 30 year treasury bonds a while ago and how much I was putting into them and there was a time that I was putting money in and even though I was doing so, interest rates were going against me, interest rates were going up versus going down.

And as you also may know when interest rates go up, the value of bonds go down, when interest rates go down, the value of bonds go up. And so I just started to do it. I did it at 4.1% 4.3% 4.5%.

And during that time, as interest rates were going up, the 30 year bonds, treasury bonds that I had purchased were going down and down in value. Well, not only are they not down in value anymore, especially the ones that I bought at the lower interest rates now, they are up considerably. And now I'm making money plus I locked in that higher interest rate.

That's how it works. That's what we have coming towards us now. So you have to plan appropriately also. Now you'll start to understand why I didn't want you to go into series I bonds. And I had suggested especially if the interest rates were at 0% the fixed ones in your series I bonds that you came out of those and you took that money and went into longer term bonds.

Well, see if you did that or you didn't, but that's case there in terms of stocks, ETF s everything's going great. We'll see what continues to happen here. But remember the key to successful investing is absolutely what dollar cost averaging? All right. Are you ready to sit back and hear a story?

So yesterday morning, Colo and KT brought me coffee. I was still in bed and we were all sitting there because, you know, I like to stay in bed in the morning because I think, I read the news. That's just my time that I gather my financial thoughts and also my own personal thoughts for the entire day.

And so sometimes when they get impatient and I don't come out to join them in the kitchen, they come to me. And so we were all sitting there and I had recently just read the email that I'm going to read to you in a second. And I said to both KT and Colo, can you answer this question for me?

What is something that you would be willing to give up your life for?

So, I'd like you all to think about that question as well. Is there anything in life that you would be willing to give up your life for, you know, for some people, it's the military and their love for the military and everybody who signs up for any position in any of the armed forces, they really are willing to give up their life to do that. And they all heroes. And I love them all so much. I can't even tell you and admire them because I've worked with the armed forces now. All the divisions of them actually, except the Coast Guard now that I think about it for years and years. And I see what they've gone through, especially if you've ever toured Walter Reed Hospital and have experienced some of their experiences when they come home from the sandbox. Anyway.

Very, very interesting question. KT immediately said I'd be willing to give up my life for you, Suze.

And I answered back because it's really the only thing I'd be willing to give up my life for. That's an honest answer. I would give up my life for KT in a heartbeat because without KT I really wouldn't know how to go on right now in life. And that's what happens when you lose somebody that you love. You always say, oh, I wish it would happen to me rather than them.

Like the times KT would get hurt, like with, uh you know, an injury or something. I was like, oh, I wish that had happened to me, not her. And I know when I went through what I went through with my neck, KT would say, oh, Suze, I wish that happened to me and not you.

And then it was Colo's turn and Colo said something very interesting that actually relates to the email that I'm about to read you. And he said, well, I would absolutely give up my life for my Children, Suze. There isn't a parent out there that won't give up their lives to save their Children. And if that's what it would take to do that, I would do that, Suze.

And I went fascinating Colo that you said that.

Now you're about to hear the Suze story that I was planning to read to all of you. But I'm really planning to read it now, after Colo answered that question, but isn't it a fascinating question? How would you answer that? Is there anything or anybody that you would give up your life for? OK.

Are we ready? This is from Peter.

I'm just going to use his first name. All right, which he said, OK, he also said to me because as many of you know that when you write in emails, I do read them, many of them seriously touch my heart. And a lot of times I will ask you for your phone number and I will call you or I will write you back. So everything is in writing again.

If you ever want to send in a question, you can do so to ask Suze podcast at gmail.com and make it short. Otherwise KT will not pick it. But if it is chosen, it will be answered on the podcast here. You know, we drop Suze School every Sunday and we drop KT and Suze ask us anything on Thursdays. So you can always do that. But again, you just never know when you will hear from me directly.

But Peter did say that it was ok if I read this to everybody, especially if other people can learn from it.

Are you ready? Sit down and listen closely?

Peter says, Suze, I've been listening to your podcast for the past nine months after my wife of 40 years, sadly passed away from pneumonia. She was great one day then gone a few weeks later. I am 72 and I had recently retired before she passed away thinking my retirement would look much different than it turned out.

I was suddenly thrown into dealing with financial matters that I wasn't involved in before as she always handled our investments and everything. Sadly, I was one of those men who just came home, handed over my paycheck to my wife and I just didn't want to deal with it any of it.

Your show has helped me tremendously. I started listening to it because my wife listened to it all the time, but I didn't think I needed to. But now I have learned a ton from you.

I'm emailing you now with a complex and emotional situation. My wife was 69 when she died and her father outlived her. She was the executor of his estate. And that role then passed on to her brother. After her death, she wasn't aware that according to her father's will and trust her inheritance upon her death would pass on to our two sons who are in their forties.

Not to me as her spouse.

At least I don't think she knew that for, she was incapacitated for about three weeks before she passed. So when I found this out, during that time, I couldn't ask her after she died, my brother in law would not change anything with the will or trust. And my father in law had memory issues. So I didn't want to rock the boat with the family. I let it go knowing my sons would take care of me.

Just recently. My father in law passed away at 97 just like your mom, Suze. He was an amazing man and we had a close relationship. My question is that I need your advice on how to find a fair way for my sons to give me some of that inheritance. So I have enough money to live on as my wife and I were always counting on her father's inheritance money for our retirement. And our kids knew that I own my home, not outright. I have a mortgage and I have my wife's life insurance policy that I have invested in T bills along with a small 401k and savings account.

I don't think I have enough money to live on. So I'll need some of that inheritance that my kids are set to receive. It could be about $1.5 million which would have been my wife's share if she hadn't died before her father.

So even though I was going to inherit that, now my two sons will inherit it. The boys feel bad that this is the situation. They totally understand what happened and they plan to give me most of it knowing it will eventually be passed on to them.

Then there's tax implications of them giving me the money and how that will impact things. My only source of income is social security and the interest that I'm getting from my investments. I know this is a long email but it's a complex situation. I hope you will read it and email me back. Thank you. One of the men smart enough to listen.

All right, obviously this was an email that came in months ago and I answered Peter almost immediately and I gave Peter three suggestions of what I would do if I was in his situation.

And the first one would be sit the boys down, talk to them, tell them that what would be fabulous because Peter only owed about $400,000 on his mortgage on a house that was worth $900,000 to simply each give him $200,000 from their money if they did inherit 1.5 million, which by the way is what they ended up inheriting and then Peter would own the house outright and be able to afford everything because of how much the expenses would go down because of the mortgage. Ok.

That was one suggestion.

Second suggestion, if they didn't want to go for, that was to give Peter maybe two or 3000, whatever that he needed to live on monthly.

And third suggestion was for Peter. Well, to just sell the house downsize, cut your expenses and things like that.

And Peter liked all three of those suggestions, but essentially was saying to me, the kids understand they're going to help me. So let's see what is best for them. Of course, a parent saying what is best for them versus everybody take a note of this...

What is best for me, Peter... me who just lost my wife a few months ago, who is grieving, who doesn't know what to do, who has retired, who needs help at this point in time.

Recently, I just got another email from Peter and here we go and listen to this closely now.

Thank you so much for taking the time and writing me back with what you thought I should do. Well, it didn't quite go as planned. So I thought I'd give you an update. Oh, so messy and complicated.

Each kid did end up getting $750,000. So again, everybody that's a total of 1.5 million that Peter was expecting to inherit. Ok. All right.

Your first suggestion, as you may remember was for them to pay off the mortgage, which would be 200,000 from each of them, which would still leave them with $550,000. But now that the money is in their accounts, they don't want to do that.

Unbelievable, as you would say.

Your next suggestion was each kid give me a monthly allowance to help me cover my expenses.

Well, I did a budget and showed the boys monthly expenses, income, assets, social security at $2000 a month, et cetera.

My monthly expenses are around 6000 and needed just 2000 from each of them. One son is being kind of difficult and doesn't want to pay me $2000 a month from his inheritance. Really? Everybody. Really? All right. Anyway, he thinks I just need to be more aggressive with my investments and I would be ok right now most of my money is in conservative investment, Suze, T bills, high yield savings and a rollover IRA.

But with interest rates going down, I'm afraid my little income will also go down as you know, I'm afraid and can't afford to lose one penny. My other son, thank God is willing and wants to help but isn't confident about what to do with his share for. He may want to buy a home, he wants to invest it. So he wants to wait to touch a penny of it, Suze. It's getting stressful for all three of us. But given that I have no say in anything, it's most stressful on me.

I don't want to have a bad relationship with either of my sons and be a burden. So now I am wondering if I should go back to your third suggestion of selling my house and living off the equity and renting some place.

Now, listen to how the tone of this email, everybody starts to change.

Then they can just keep their God damn money that should have gone to me in the first place. But life is in fear. Sorry. But I am somewhat resentful and mad at my wife for not planning better. What was she thinking? She knew she was going to get this inheritance and that would secure both our futures forever.

But as many times as she said, she was going to take a look at her dad's will and trust and make sure I was protected if she did die before her dad. She just never got around to it. At least if she had done that, I wouldn't be begging my sons to help me. So not only am I angry at my wife that I love and adore and I miss more than you have any idea, but I'm angry at myself for not being proactive and engaged in all of it before it was too late.

Everybody take note of what I just said, are you engaged? Have you taken the actions you need to take? Are you just assuming that because somebody is older than you, a parent, whatever that they are going to die before you? Have you had discussions with them about money, who it goes to how it gets passed down? Have you?

Now, I will continue.

But worse, Peter says I'm heartbroken over my sons, sons that I would have given up my life for if it could save them in any way.

And I thought I was so close to my sons. I thought that they were my best friends. You say people first then money. Well, my sons obviously care more about money than me. I feel so lonely and afraid and as a man that is so hard for me to admit to anyone but you sorry, I guess I am ranting now. Just wanted to see if you had any thoughts. Thank you in advance Peter.

Mhm. Yeah. Do you understand why I read that letter?

Do you understand the importance of especially if you are in a relationship that you take the time to talk to all family members and make sure that everything is set up exactly the way that it should be.

You should check the beneficiaries on all your retirement accounts. You should check and have the courage to speak to your elderly parents or in laws about how their assets are, set up, what their wishes are and make plans that if one of you was to die before them, how is it going to work and discuss it as a family to talk to the kids, to talk to them about? If anything happens, you have to promise me, mommy talking to these sons, you have to promise me, you are going to take care of your father. You promise me right here and right now don't just take their word for it, do a contract that they have to sign so they could see before they inherit, especially a large sum of money.

What they said when they were in a state of love versus a state of greed.

There are so many things that you need to take care of more than just watching your assets going up, going down this stock, that stock should you sell this ETF what should you do?

It's these things in life that you, if you do not take care of in a very strange way, you are giving up your own life, your own security, your own comfort, so to speak in your later years, like Peter now is doing so, Peter obviously is going to have to most likely sell the house move. He didn't want to do that right. But he's going to now have to make hard decisions because he has now just learned he actually can't count on his sons.

But he at least another suggestion was ok even though your sons may not end up giving you any money. The question becomes, who is the beneficiary of this money? If something happens to your sons, Peter, so become the beneficiary of a pay on death account, wherever their assets may happen to be. So that if something happens to one of them, they're in a car accident, who knows what can happen?

That money comes to you just do not make the mistake, Peter and take it for granted again, that you're gonna die before these kids. However, now you have to put yourself in a situation where you can take care of yourself financially. You can afford your lifestyle financially and that you don't have to ask anybody including your Children for money and maybe later on out of the goodness of their hearts, they will do what's right versus what's easy and take care of their father just that simple.

So all of you right now need to really decide to make sure that everything is set up the way that it should be set up for every single possible situation that could happen in your life.

All right. And that brings me to the end of this Suze story. You know, in a very strange way,

I have not given up my life, but I have dedicated the past 43 years of my life to making sure that every single one of youtakes actions today to protect your tomorrows.

So I can only hope things like this little Suze story really drives home. What I've been saying now for all those years, people first, then money, then things and if you really do that and make sure that everybody else who has anything to do with your money is doing that, then you will be unstoppable.