July 12, 2020
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After watching the documentary film, The Biggest Little Farm, Suze came away with a new perspective on how things really do fit together in the universe. She explains how we all have to keep faith and stay focused on planning for our new future, so that we can reap the benefits from our own financial farms.
July 12, 2020, Suze O. here and welcome to the Women and Money podcast as well as the men smart enough to listen. Three days, just three days you have until July 15 to do what? To pay the taxes, file your taxes for the year 2019. Because of what happened with COVID they allowed you to postpone from April 15 to July 15 and here we are. But it's not just about taxes. Remember, you also have until July 15 to open up a Roth IRA or a traditional IRA for the year 2019. And if you can do that and fund it, you absolutely should. Obviously, you all know by now I am a Roth freak. I want you to do Roth IRAs, I want you to do Roth 401ks. I want you to forget, forget, forget about all the tax write-offs that you can possibly get with your traditional retirement accounts. One day years from now, you will thank me if you listen to me. So today's podcast theme it's kind of interesting. The Biggest Little Farm. What is that about and what does that have to do with money? Well just sit back and listen. A few weeks ago, I was watching with KT on Netflix, this documentary that was created in 2018 called The Biggest Little Farm, and Alexis, my niece, told me, Suze, you have got to watch this movie. And I'm like, thinking of the title going, I really want to watch a movie by the name of The Biggest Little Farm. Really? And she said, just trust me on this, you've got to watch it. So OK, we took her up on it and we started to watch it. And it's really a story about a family who gives up everything, moves to a farm, and what happens to them over all the time that they have owned this farm. So what was fascinating to me about this film, this documentary, was that oh my God, these people suffered and suffered and suffered. But what they learned as well as what I learned was that there was a reason for everything that went wrong. So when all the bugs came to eat up all of their plants, in the long run, there was a benefit to that. I'm not going to give away the entire plot here because I really do think you all should watch it. But when the waters would come and flood out something, when fires came, every single thing had a purpose. And every single thing that went wrong, in the long run, turned out to be a real blessing for this farm because nature had a way of taking care of itself. And nature literally with the help of them, obviously, but by letting nature be nature, this land that they purchased was transformed from rocks and dirt, and no way would it grow anything, to this incredible farm that produces food and everything that they need to sustain themselves. And it started me looking at everything seriously, in an entirely different way. So, for instance, like this morning, just stick with me here all right, everybody? So this morning I was sitting on the loggia and I was watching all these seagulls as they kept attacking these trees that we have on our property. These big bushes and trees and I was getting mad at them, it's like, leave those trees alone. What's wrong with all of you? And then I started to watch really closely, and as they were diving into these trees, they were coming out with these bugs that they were eating, and these bugs were actually also destroying the trees. So by letting the birds do what they needed to do, then my trees will survive. The bugs, obviously, get their own life inside the little seagull's belly, but it was almost as if, oh, yeah, it's all perfect, stay out of the way of perfection, Suze Orman. So what does all this have to do with you? Truthfully, all of us are living on a big financial farm right now. It's as if we are living on this desolate farm that isn't producing jobs, isn't really producing a way to make a living, isn't producing anything for many, many millions of people to be able to live off. So, it's almost like we're on the biggest little financial farm that's ever happened, really, in the history of the United States. And on some level, that's absolutely true. It's very different, believe it or not than the Depression, even though it feels like it's the same. But it's not because now we are in a situation where things have absolutely changed and they have changed forever. Also yesterday, I was sitting on the loggia, I've spent a lot of time on that loggia, and Colombia, who works for us, sat down with me and he said, Suze, when do you think things are going to turn back to normal? Do you think that's ever going to happen? And then I went through this entire litany of how one thing leads to another, leads to another, and essentially the answer to him was nope, not the normal that you used to know, Colombia. But the new normal, and this new normal will produce a financial crop that everybody gets to benefit from sooner than later. And what I mean by that is this. If you really look at the economy of the United States of America, it was for the few, it was not for the many. The prices of college tuition out-priced most of the kids throughout the United States to go to these colleges, and it was almost as if college was only for the privileged few. Or, if you did go to college and you had to take out student loans, you then ended up in a situation where you couldn't afford to even pay back your student loans. So now, no matter how much money you made, you were always behind the eight-ball. And the truth of the matter is, is if you look at college tuitions today, they have so outpaced the rate of inflation it's not even funny. They just kept raising and raising and raising their rates, their tuitions, and really they out-priced most of the people in the United States from being able to send their kids to get a decent college education at a cost and in a price that they could afford. So, everybody was really going into debt just to get their kids educated. That is something that never, ever should have happened, and I could go on and on about how things have been going on in the United States. Look at the cost of real estate. Real estate had skyrocketed, out-priced most of you from ever being able to buy a piece of real estate in certain areas. Good luck in San Francisco, New York, so forth. And so, homeownership became something that was really only for the few and not for the many. And what's interesting about a farm, is a farm, and most of the farms in the United States of America they're there to feed the many. They're there to produce items and food for all of you to at least be able to go into a grocery store and purchase that which you need to feed your family or you want to feed your family. And now, with all the stores and the groceries and things have shut down and not many people really still going shopping like they used to. On the road, when I was back in Florida a little bit ago, you could go to these places that are set up on the road and literally get a whole box of vegetables and fruit that normally would have cost you $40 or $50 in the grocery store for $10 because nobody is buying it. So all of a sudden, it's kind of bringing down the price of that and making it affordable for the many rather than the few who could afford to buy it, even though it was meant to be for the many. Have I lost you yet, are you still with me here? So I've been giving a lot of thought to this, and I understand very well how hard it is for so many of you. We still have 32.9 million people getting unemployment right now, and that is really 23.77% of the working population. So, how they come up with an 11.10% unemployment rate is beyond me when you have 23.77% of the working population getting an unemployment check. But that is beside the point. The point that I'm trying to make here is that we have got to start looking at everything very, very differently, kind of like I just did when watching The Biggest Little Farm, watching the seagulls and everything, trying to get the bugs that were hurting the plants and everything like that. So we have to put on, really, new glasses so that we can see everything that is really happening out here and truthfully, a new perspective. And while I get that there is devastation happening for many of you out there, you have got to keep the faith that this devastation is going to lead to your biggest financial farm. It's going to lead to the ability for all students to have a college education, for real estate to probably be more affordable, for the luxury of being able to work at home and not have to drive so you don't necessarily have to spend all this money if you want to be a parent on nannies and everything else. So again, just stick with me here. So when Colombia was asking me this question, here are the things that I was telling him, the things that I see as devastation right now, but that will eventually lead to great results in the long run. So let's just start with what is the first thing that I see and that all of you are experiencing that's happened on our financial farm. Well, rather than going to work and going into an office, we weren't allowed to go out so many people now are working from home. And because many people are working from home right now and they're always going to be working from home because I doubt highly a lot of those jobs are going to go back to the office, it has effects two other areas, big time. The first area is clothing. This is why, because you have so many at-home workers now. This is why you have companies like Brooks Brothers, J Crew, so many that are finally about to file for bankruptcy because now that you don't have to go into the office to work for many of you, you're finding yourself in a situation where oh, I don't really need to get dressed anymore, do I? I can wear my sweatpants or my Lululemon's or whatever it is that you wear, and I can wear it every single day. I don't have to change, I don't have to do anything, because everything now is far more casual. Even if you're on Zoom meetings or like me, if I'm doing a TV interview, do you know I'm like wearing the same jacket that I got that's like 30 bucks and I've been wearing it, that white one that I always wear if you see me on. I like how it looks, I like how it feels, I don't care. So, I've been wearing that every single interview. I have like three jackets like that that I rotate around, but that's it. Not like how I used to have a different, you know, leather jacket, every time I did The Suze Orman Show and spend a fortune on that. It's no, I don't care. Or, I'll wear a shirt that has, a hoody on it, and I like that. And KT says you're doing an interview for CNN in that? And I go, uh-huh, got a problem with that? So, I'm not spending any more money shopping to do what? Be on television. And the people at home aren't spending any money to go into work, and that affects the clothing industry. So, you will see places such as Macy's and JC, all of these that will have to start to downsize or at least change the kind of clothes that they're going to do because Brooks Brothers people just aren't buying suits. The Men's Warehouse, they aren't selling suits anymore. So, that has changed that at the same time commercial real estate is going to change because many of these buildings, and I've said this before, that housed all of these offices and people who had to work in them, they're going eventually absolutely to go away. But let's stay on companies for a second here because this is going to have a huge effect, really, on all of you. I know you're all waiting for your jobs to come back or for the economy to open up, and I'm just going to tell you I don't think it's going to open up the way that you think it's going to open up. That it's possible that a lot of the jobs that you did have just are never going to come back, and why is that? It's because the companies now are starting to realize that with things like COVID comes the fact that oh, I can't have human beings doing certain jobs because they can contaminate each other. My workforce could be contaminated, my building could be contaminated, my clients and the people we service could be contaminated, so maybe human beings aren't the way to go anymore. Maybe what we need to put out there are robotics and don't think that it is impossible that sooner than later, when you go to check-in or when you go to McDonald's or a Taco Bell or wherever it is that you put in your order and there's a robot taking your money. Or, you can't use cash anymore, you just swipe your little card that you have. Money is done, you go to the next window and there is a robot or something automated, however they do it, it comes out to you. You never see human beings behind the scenes, you have robots making the hamburgers and the chicken and everything, and now you have a workforce. There's a workforce that used to be all human beings that there was a cost to health insurance and everything is now just what? Replaced by robots that don't have health insurance, they don't have sick leave, they don't have contamination, that way everything is clean because they don't go home at night to a family that could contaminate them. So don't think that can't happen. You know, a while ago I did a podcast saying, don't be surprised if because of artificial intelligence and this was a long time ago, maybe two years ago, that you know by the year 2030 that we will have unemployment at 25% because of artificial intelligence. So, do you see where I'm going here? Because now this whole COVID has given many of these companies a reason to seriously invest in what? Automation, robotics, and artificial intelligence to take the what-ifs out of something like this happening again. So we have to plan for that. And when we do that, maybe the cost of goods will start to come down, and maybe that will make more things available. Who knows what will happen there? But that's something you all need to think about as a possibility. So, if you're in a service industry, just think about what are you going to do if someday something like that happens. Obviously, you have the school system. And now, particularly because the administration has said because international students can't stay here in the United States unless they're taking an in-person course or one person course. If that happens, do you have any idea how that's going to affect the finances of many of these major schools? And already the school systems are in big trouble because whether you know it or not, many of the universities are huge investors where they take money and they invest it in the market, and they invested in bonds, and they do all these things with it. And who knows what their return has been? Who knows how it will affect everything in the future. But the real truth of the matter is, and I started this earlier in this podcast, tuition for universities have to come down, and maybe we have a whole new type of university that's about to emerge that really is available to the masses at a price that everybody can afford. So even though a lot of these things right now seem like they are negatives and oh my God, Suze, you have got to have faith that in just a year, two, three, four years it will pass very quickly. Your biggest little financial farm is going to be a farm that really provides more things for more people at a cost that everybody can afford. And what do you do, however, in the meantime? So, last night, I was reading a newsletter that I get every week from my good friend John Mauldin, who is just so brilliant I can't even stand it. And his newsletters is called "Thoughts From the Front Line" and it's a free newsletter, you might want to look it up and start reading it. Brilliant, brilliant, man. And in his newsletter, he said something that really hit a chord with me that I would just like to share with you. And he talks about how, after consulting many of these financially brilliant people that he talks to all the time, that we're going to go through a period of great uncertainty and that you need not just to have a plan of Plan A, this is what we're going to do. You need to have a plan that is A, B, C, and D, and let me just tell you a few of the things that he says it's really important, and I agree with him so much, that every one of you should be thinking about. So, I want to plant the seeds, the's seeds so that you can see which one of these seeds do you want to plant in your financial farm? What is it that you need to do right here and right now, to make sure that in a year, two or three from now, you really are OK? And, again, I get it, Suze, I'm just trying to get through until next week. It doesn't hurt you to go through this exercise because there are many of you that listen to this podcast that still have a job, that are still funding your retirement accounts, that want to buy a home. You want to do this, you want to do that. OK, so just listen to me for a second here, all right? And here are the things that even John, who is a seriously sophisticated and successful person, these are the questions that John is asking himself. He's asking himself, what do I do if my income drops more than I expect it to? He needs to have a plan if that happens to him, he needs to have a plan. If some of my investments don't pan out the way that I think they're going to pan out, what should I do? What new income opportunities are there out there for me that I can take advantage of? This is how a great financial mind is working. He's also asking himself, where can I cut back? Like, how do I cut my expenses? It doesn't matter how much money you make, doesn't matter what's going on, you have to ask yourself the question right here, how do I cut back? And last but not least, what do I need to focus on? So these are the things that John is thinking about, and these are the types of things I want you to think about because this is Plan A, Plan B, Plan C, and Plan D because again, we are all facing a period of great uncertainty. However, he also states, so our world isn't like it's ever going to be again, but it's going to be great in its own way sooner than later. So it is so important at this point in time that you keep the right perspective so that maybe you're sitting on rocks and dirt and your financial farm isn't producing anything, it can't feed you, it can't do anything. OK, just know that in that moment there's got to be perfection for you to figure out what can you do? Naturally, what's going to naturally occur now that makes it so that your life is the life that you really want to live and you need to live? And that will happen if you have, a Plan A, B, C, and D. That will happen if you have a good attitude and you understand that in time all will be OK. That will happen, however, if you don't sit around and wait for an old job that an employer said will probably come back and it may never come back. So, you have really got to start to really make plans and plant seeds that can create a future that you want to live. At least you can start that. I mean, just because you may not have money now or whatever it may be OK, that doesn't stop you from making a plan. So I called this episode The Biggest Little Farm because you have to have hope. And really, as I was watching this movie, I don't know how they had hope with one catastrophe after another, but they just kept doing what they were supposed to be doing, and it really is an amazing thing what happened to them. And I believe from the bottom of my heart that if you could just keep doing that which you know you need to do, to just keep going at it, sticking with it, one day you will, I promise you, reap the rewards of your own personal financial farm.