Podcast Episode - Suze School: Your Financial Armour

Financial Independence, Financial Planning, Podcast, Savings Account, Stock Market

January 07, 2024

On this episode, Suze helps you prepare for this new year with a lesson on current interest rates, why the stock market is taking a break and how you can keep your money safe and have it grow at the same time.

Listen to Podcast Episode:

Podcast Transcript:

January 7th 2024 welcome everybody to the Women and Money podcast as well as everybody smart enough to listen, Suze O here and today is Suze School.

Now, did you notice anything different about the theme song?

Did you notice that? I had Robert the producer add two opening lines to Sia's song Unstoppable.

And were you able to understand the words of those two lines? If not they go like this,

I put my armour on, show you how strong I am.

I put my armour on, I'll show you that I am.

And then of course it goes on to say as you already all know, but just in case you don't,

I'm unstoppable. I'm a Porsche with no breaks. I'm invincible. Yeah, I win every single game. I'm so powerful. I don't need batteries to play. I'm so confident. Yeah, I'm unstoppable today.

Now, why in this year of 2024 did I ask Robert to add on those two lines? I put my armour on show you how strong I am. I put my armour on, I'll show you that I am.

The reason is truthfully to be unstoppable to just go for it against all odds and not let anything stop you. You have to have courage, you have to have strength. You have to in essence, put this invisible armor on to show everybody how strong you are to show everybody who you really are.

And so that's why because I wanted this year to go one step further, one step deeper into the inner strength that I want all of you every single one of you to have.

And one of the reasons that this came about happened just the other day. And as I'm recording this, we happen to be in Florida and I needed an adjustment and some new glasses. So we went into the place that I always go to get my glasses and I mainly go there because there are two women who work there. And I love these women.

You know, it's like forget the glass place, KT and I just go to talk to these women.

And as I heard their stories, I realized, oh my God, these women in particular need to put armor on. They need to show the world how strong they happen to be.

But yet they choose not to, they choose to stay in a situation. One of them that I don't think is very healthy for them on any level and the other one chooses not to really show the world her really incredible talent because she's just kind of settled in to what is going on in her life without going into much more detail about it. I left there incredibly sad, sad because these are extraordinary women.

I see more power and energy and potential in them than they see in themselves.

And I was thinking, oh my God, I bet if I met all of you or many of you, if I could just meet you one on one,

I bet that just maybe you're not living your fullest potential or your fullest strength or your fullest desire to show everybody who you are and how strong you happen to be. Therefore, the first two lines of Sia's songs have been added to this year's theme song now, you know, ok?

The next thing I want to tell you is about interest rates because all of you are always so concerned. Are interest rates going up? Are they going down? What should I be doing? I need you to also be calm this year to have patience this year, to stop watching everything that happens every single minute.

I need you to take the long approach to how you should be handling your money.
I know it's cliche when I say it's not a race, it's a marathon, but it's true. It's a marathon. I was also at somebody's house on New Year's Eve in the day there. Did you see the balloons we sent up anyway. That's besides the point, if you're not on the Women and Money app, you missed it anyway. But they're there. You can still join it. And there were younger kids there.
And of course they always love to talk to me because they really, in my opinion, want to impress me about the stocks they're buying. And one of them said, hey, Suze, Suze, did you see this one stock? I forgot what it was called. It's up 1500%. It's, it's this thing that, that you drink after you have a hangover and you no longer have a hangover.
And I'm just looking at him like, ok, another one has this other thing, Susie, this stocks up 300%. Can you imagine if we had only bought it? And da da, da da. And I said, boys listen to me the way you build tremendous wealth in the stock market is over time is about investing in one thing and hopefully keeping it for a long, long, long time. Imagine if you had bought Apple when it first came out or Amazon when it first came out and you just kept it, you weren't satisfied with just a 50% gain and then you sold it and did what with it, then you bought another stock that probably went down as Apple's gone up like 10,000% or whatever that may happen to be.
I asked him, I said, do any of you listen to my podcast?
And they of course, said, no, you know, your podcast is called Women and Money. I said, it's Women and Money and Everybody Smart Enough to listen. So you're obviously not smart enough to listen.
I said, there are certain stocks on there that I told you about. Palantir was one of em when it was around $7 a share.
And I said, did you buy it? It's doubled. You know, right now it's at about 15 or 16, it's down from its high of this year. Thank God because I wanted to buy more. I said, but that's a stock that's going to 50 that's a stock that you should own. It's not up and down and all over the place and everything I said, just went in one ear and out the other to them with that said, I think it's really important that all of you just have patience this year.
Like we ended last year talking about the magnificent seven and how much they went up and how they were fabulous. And then, of course, right after that, what happened, they all went down and down and many of you, I'm sure may have been really upset because maybe you bought some or you bought the Qqqs or whatever it may be for you to participate in them and rather than being happy that it went down so you could possibly buy more
I'm sure you were depressed. Like, oh my God, I'm losing money.
So when it comes to interest rates, you need to be patient here because I think interest rates are going to be staying right around where they are right now for the next few months. I don't think you're going to see the Feds cut right away. Maybe they won't cut until the middle of the year. But eventually interest rates will go down.
So for the short term here in the next few months, interest rates will stay most likely right around where they are.
But it will not surprise me on any level. If you then see the two year, possibly, even the 10 year treasuries go down into the threes.
You just have to be patient with it because it will, in my opinion, absolutely happen.
But since we don't know when it is going to happen, you have to lock in the good interest rates, the incredible interest rates that are out there right now and not try to time it, not try to catch it at the very top, but really look at what's out there and make a decision for yourself. And how does this make sense for me in my particular situation? Now, last Thursday, KT and I hinted that Alliant was going to be changing the interest rates on their one year certificate of deposit and they most certainly did. They raised it from five and a quarter, all the way up to 5.4% or 5.45% for amounts of $75,000 or more.
You take out your little Suze notebooks right now and you listen to me, remember at Alliant Credit Union, my alliant.com, alliant.com, my alliant.com. That's where you go. And you know, you're at the right place. If you see my picture there,
At Alliant for some reason, they just don't do a one year certificate of deposit.

They do a 12 to 17 month and 30 day certificate of deposit and then they switch to the 18 months to 23 month and 30 day certificate of deposit.

So that means that you could if you wanted to put $1000 in the 12 month at 5.4% $1000 in the 13 month, the 14th month, the 16 month, the 17th month and get 5.4% for it. Now, that is a great rate, especially if you're smart. I'm just saying and you have a one year certificate, a deposit coming due wherever you may have the one year certificate of deposit coming due and all you want to do is lock it up for one year. You should lock it up with the one year certificate of deposit at Alliant Credit Union. If you could lock it up for a little bit longer, then why not lock it up for 17 months and 30 days at 5.4% rather than getting an 18 month certificate of deposit at Alliant Credit Union for 5.3%.

The only reason that you might want to look at the 18 month certificate deposit at that interest rate of 5.3% or 5.35% for $75,000 or more is if you want to go out even longer and you wanna lock it up for 23 months and 30 days, which is almost two years. Compare that to the two year Treasury note, which is only at 4.3%.

You have to take advantage of these high rates while they are here. Now. It is true. You can still, for short term, if you need your money, short term, you can go to three and six month treasuries or even a money market account or whatever. But if you have money that you really want to get the highest interest rate for at least 1 to 2 years, there are not two better CDs out there in my opinion than these right here that I talked about.

And remember it's not just about the highest interest rate, everybody, it's about the safest interest rate. And I know because I talk to Dennis Devine all the time. I talk to the people behind the scenes at Alliant Credit Union.

So I know what's backing these. And so I don't have to worry one day that all of a sudden I'm gonna read in the papers. Alliant Credit Union now has gone under. It's not gonna happen here. So just same. Ok, that's number one.

Maybe the song was number one. So maybe that's number two. Anyway. All right, let's go back to the stock market now for a second and maybe that will be number three.

The market as we speak right here today is taking a break. It had a really big run last year, a tremendous amounts of money, tremendous percentages, especially if you were invested in the right areas. But even the index funds were up in the mid 20%. That is a lot.

So that when something runs that fast and that far, usually it takes a break and it rests. It's consolidating right here.

But after again, in my opinion, after it has consolidated and it has rested and it has taken a breath,

I think we will continue to see it go up long term. Now might not be for another two weeks or four weeks or six weeks, but it should continue to go up, especially in the mega area. That is the magnificent seven in those big stocks we talked about. Do you remember their names?

I'm not going to tell them to you, go look at another podcast, but you should know their names, right. KT knows their names. Amazon Apple, you know, NVIDIA, Tesla, Microsoft, those kinds of things. Eventually they should start to go again.

But there are other areas of the market that should also start to go again. Now, all the individual stocks that I have given you over the past six months or so from the Pfizer and the Verizons and the reality incomes, they are all doing fabulous. But there are many of you out there that just don't wanna buy individual stocks. You don't want to watch them, you don't want to get involved with them and you want a little bit more diversification than that.

And the other day somebody wrote me and they said, Suze,

I have $1000. I want to invest, that's all.

And can you give me a list of exchange traded funds that would give me total diversification?

But in specific areas that are favored more than just a standard and poor's 500 index fund or the vanguard Total Stock market index ETF or whatever it may be that you always talk about Suze. Can you bring it down and individualize ETFs even more into specific areas?

I read this email and I thought, hm, kind of interesting. That's an interesting thing to do but not a hard thing to do now. It's not so easy because this person only wanted to invest $1000.

But I thought about the areas that I think are going to move faster this year or are more favorable this year than other areas of the market.

They happen to be areas like the financial area, the tech area, still the health care, home builders, biotech, things like that. Those are all things that I would be investing in, but I would be doing it with individual stocks, but that isn't what this person wanted. And then I had a feeling it might be what all of you want as well.

Are your little Suze notebooks out? Because I'm only gonna do this once, everybody, if you had $1000 that you wanted to invest and you really wanted to be diversified in the areas that I think are more favorable for this year long term.

And you wanted to do it in an exchange traded funds and not individual stocks. These are the ETFs that I would recommend buying and I did recommend buying to this person.

You would buy one share of each of these. You would buy one share of the Standard and Poor's Dow Jones. Industrial average symbol is DIA it's $374 a share. You would buy one share of that.

You would buy one share of the S and P biotech spider ETF symbol is XB like in boy, I, at $89 a share, you would buy one share of the Ishares US Home Construction ETF symbol ITB like in beautiful at $98 a share, you would buy one share of Financial Select symbol XLFF F like in Francis and that's at about $37 a share

you would buy one share of XLV V like in Victoria, the Healthcare Select ETF at $139 a share.

And the XL K, the Tech Select ETF which would be a little bit different than the QQQ, but it would absolutely be a way to go at $184 a share.

And then you would buy one share of XLC C like in Charlotte for the Communications Service Select ETF, those are seven ETFs that add up to if you were to buy just one share each of those $993. Now, obviously, those prices were as of the close of business in the stock market last Friday.

So therefore, maybe it goes up, maybe it goes down. But you get the idea, it is a great way to start if you have more money that you want to invest, ok? You can do that and you would figure out how to do that and how many shares of each you would want to buy. But it is a way to start learning about the stock market. ETFs and buy an individualized exchange traded funds.

That's how you could invest $1000. Now, maybe you have $10,000 to invest, you could buy 10 shares of each. If you have $100,000 to invest, you could buy 100 shares of each.

But that is something that you could do that would give you extraordinary diversification but diversification in the areas that are most likely going to go, which is probably a better way to invest given what's happening in the economy and the markets than broad index funds. Just saying now there's absolutely nothing wrong by still investing in the vanguard total stock market index. ETF that has 2000 stocks in it that encompass all of these types of shares or even the Standard and Poor's 500 index.

But this might just be a different way for you to start thinking about investing. So if you had $1000 and you were just new to investing or you just wanted to see what happened and how does it work when one goes up, one goes down, whatever it may be.

This is a way that you could start if you had $5000 maybe to invest, maybe you would do one share right now, see what happens in the market and depending you could do another, you know, share of each as time goes on and dollar cost average into it.

That's just where I think things are going and just some suggestions for you.

Now, I know last year I briefly mentioned that maybe I'd be working with somebody to come up with a way for you to invest where we suggested and we monitored everything for you. We told you when to buy, when to sell and everything that is not going to be for a little bit, but it is going to be, but I don't want you to wait until that happens because to do something like that, there's all these regulations and all these things you have to go through. So it will be a while.

But my friend and I, and I think many of you may know who I'm talking about, but we'll just have to let you see for sure. We have started working on it. We came up with what we really want to do. And so now we're gonna see what it takes to put that in place.

Hopefully you'll be happy when we do so, but for now you still have to do certain things and not wait for us. But you also have to remember everybody. It's not just about investing, it's about how you are investing. Are you doing Roth retirement accounts? Do you have a will and a trust? Do you have an advanced directive and durable power of attorney for health care? How do you own title to your home? How do you name your beneficiaries? What kind of mortgage have you done? Do you do? Uh 529 plan or not? I mean, and on and on there are all these personal finance decisions that you have got to make.

All right, you have got to make them. It's not just about what stock ETF this and that. It's about knowing the rules, knowing how to play this financial game called life.

So that you really do a merge a winner. And that's what the Women and Money podcast is all about. It is not just about what stocks, what interest rates and those things. I just wanted to tell you that because it's not always gonna be, I'm gonna talk finance like this every single week. I'm also gonna get personal with you as I always have done and I always will do and guide you to the best of my ability in every possible way of your life.

But until Thursday when Miss Travis joins me again for another Ask KT and Suze Anything, the truth of the matter is we want all of you to be smart to stay smart.

And if you do that, we promise you you will be unstoppable.

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