Podcast Episode - The Emotions of Money

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In this podcast, Suze explains why we should not let our emotions rule our ability to make smart choices with our money.

June 7, 2020. Welcome to the Women and Money podcast, as well as the men smart enough to listen. Do you know that last Friday, June 5, was my 69th birthday? Amazing, right? And what's interesting is that I was celebrating, I had the best birthday, ever, really. And partly because of all of you and the thousands of birthday wishes and really heartfelt emails and videos, especially from those that I've worked with over the past 20 or 30 years. For some reason, the events of late almost were like this impetus for people to do what? To tell everybody how they feel. And the letters, again, and emails that I got were so touching, especially from my workmates, that I spent most of the day reading these and crying. It was so overwhelming, I can't even tell you. I just want to thank all of you, all of you, for wishing me a happy birthday because indeed it was. You know, as I think about birth, obviously, we've also been all thinking about death because of George Floyd and everything else that has been going on. It also makes me think about how so many people out there, so many of you, want to end your lives because you don't have the money in your lives that you need to live. Not all of you, but many of you. How many emails or letters have I gotten over the past because your spouse committed suicide because they didn't have the money to support you or to pay the bills. People take their own lives because of a lack of money, and that is why learning about your money, learning about who you are, learning about the emotions of money, is so vitally important. Money or lack of money should never be the reason that you take your own life. That is just ridiculous because you can always fix money. You can always fix it. And I talk about this from personal experience because it was about a year ago, a little bit more than a year ago now, that my own cousin took his life because of probably many reasons, but mainly he ran out of money. And no matter what he tried to do, he couldn't fix it and he took his life. So, I know about this from personal experience, and that is why dealing with the emotions of money, your feelings about money, is so very, very important. And I wanted to talk about this today because the main purpose of the Women and Money podcast, the main reason that I started it, actually, the truth is, the main reason that I started to go on television and write the books and do what I do was that I learned a long time ago that money alone, knowing about what to do with money, knowing about what stock to buy, knowing about all these things, isn't the key to true financial freedom. That's why most of my programs from the start have always dealt with the emotions of money. My expertise is grounded in personal finance, and personal finance is personal to each and every one of you. When you just talk about money and investing money, money, money, money, right? Anybody, truthfully, you guys can do that. Anybody. But when you combine who you are with what you do, with what you have, then you have a complete financial system that is able to operate under stress, under happiness, under unknowing what to do, under knowing what to do, under all circumstances. And the reason that I want to talk about this is that since the end of February, this podcast has really concentrated on the stock market. What to do, what not to do, all of those things. And you needed that guidance, and I am very happy to have provided it for you. But that is not the goal of this podcast. As many of you know, I have an app, the Women and Money app, and I love that app. And there's a community center within that app which allows many of you who are part of that community, meaning you've downloaded the app and you're using it. I'm watching some of you have conversations about you wish I would talk more above just finance. That's why you come here, that's why you come to the app. You really don't want to hear my personal views or my things that I want to talk to you about; you are coming here to learn about money. Well, if you are coming here simply to learn about money, you are coming to the wrong place. There are other podcasts that you should go to and I encourage you to go to. I encourage you to leave the app and go to the apps that will meet your needs. But I am not one dimensional, nor are most of you because you will find, as you just realized a few months ago, or you should have realized that when all hell breaks loose as it did at the end of February, you don't know what to do, emotionally speaking. Your emotions rule your actions, your thoughts rule your actions. And when you don't know what to think or what to feel, how to really keep everything under control, that's when you sell at the wrong time, you buy at the wrong time, and you make mistakes. Even if you had purchased the most incredible stocks when everything went nuts and all of a sudden you saw a 38% decline, you were frozen, you didn't know what to do. The majority of you came out of the market and so it was important for me on this podcast to try to get your emotions under control. Not to tell you what to buy in terms of specific stocks, but just to keep you calm and hopefully make it so that you did not exit the stock market. In doing so, I also told you, as I've always told you, the best way to invest is through dollar-cost averaging in indexed funds. And I did a switch from Standard and Poor's 500 Index to the Vanguard Total Stock Market Index. Obviously, I like ETFs better than funds, but up to you, and that was the advice to the masses. I also mentioned an ETF by the symbol of XLE that went from 35 to 22 and right now it's about $45 a share. Right? Now, listen to me, even if your emotions kept you from buying more when it went down to 22, if you still own it, do you understand you would be up 28%? But, that's a big if because your emotions, I'm sure, even though Suze said to buy it at 35 which is when I said to buy it, that's what it was at. Even though I said to do that with small amounts of money, when it went down I'm sure you freaked out and you sold it. However, here's the point. I don't want this program to be totally about the stock market where all you want from me is Suze, what should I invest in? I want it to be more than that. I want it to be about everything you need to do when it comes to your personal finances. I also noticed on the app that many of you noticed that I had said that I had sold Colombia, Colo, who lives with us, out of his portfolio as well as I sold out of some of my portfolio as well after the markets had rallied here. And I did that, I think about two or three weeks ago or so. But what you don't then hear me say is oh, I looked at that and even though I sold out, I bought right back in with half of the money that I sold out of a few days later because I realized I'm not going to fight the tape. What I do with my money is not what you should be doing with your money. What I do with Colo's money is not what you should be doing with your money. I'm trading it, I'm doing all kinds of things. I'm switching from one set of stocks to another set of stocks based on which set of stocks I think are going to increase. Are they going to be stocks that are from the pandemic that everybody's going to be using? Are they up? I'm switching all the time, so do not do what I do. I have different amounts of money than you, whatever it may be. But I have never come out of the stock market with my base investments in stocks. The stocks that are good quality stocks, giving me dividend income in areas of the market that I'm going to hold for years from now. So when I say something, know when I'm talking about myself, that doesn't mean that is what you should do. I will forever, however, tell you that money that you need within one year from now is not money that belongs in the stock market, and it's still not. So, if you need money in a year for a down payment on a house, to send your kids to school, whatever it may be, you should come out of the market and it does not matter if the stock market continues to go up. What is wrong with all of you? You get more upset about the fact that you came out of the market, kept your money safe and sound, maybe even two or three weeks ago. Then the market rallies, and now you're more upset about the money that you could have made versus the money that you could have lost. Because if you think that this market is straight up from here, I don't know, maybe it is, maybe it's not. But you better know that if you need money, and that money is in the stock market, that is not money that belongs in the stock market, especially if you need it within one year. So stop looking after you've taken it out because then you're on an emotional roller coaster, which is why I always talk about the emotions of money. So as time goes on here, I don't want to talk about the stock market. I want to go back and talk about personal finance. What do you do with your money? Not just the money in terms of investing, but what do you do with your money in terms of what kind of retirement accounts should it be in? Should you be buying a home? Should you be taking out student loans? How do you get out of credit card debt? All the things that are about personal finances. Should you have a will? Should you have a trust? What kind of life insurance? All these things have absolutely nothing to do with the stock market. And I am not going to allow this podcast to turn into a stock market report for all of you. So, you just all need to know that. I also want to talk about, however, that you better be very careful here because the market now which is controlled by people, all of you that are investing because you don't know what else to do and you don't want to miss this major bull run that we've had. The problem is this. Last week, especially on Friday, when the market went up over 800 points, OK, 829 points to be exact. The problem with that is it went up because the unemployment rate, rather than going up because it was projected to go up to 20% from 14.7%, it went down to 13.3%. And because the news went out that the economy is coming back, unemployment went down, everybody went crazy. But you want to know what you didn't know, that you should know, is that unemployment is figured and controlled by the Bureau of Labor Statistics. They're saying that how the unemployment rate that just came out wasn't figured correctly. So this thing that we saw go up 829 points, the Dow, anyway, was based on information that wasn't accurate. Now, why wasn't it accurate? Let's go to Suze School and learn about how the unemployment rate is figured because it might help you understand how inaccurate it actually can be. First of all, the census has all these surveyors that go out, and they ask about 60k households questions about whether they are working or looking for a job, and they're asking it for the week of X to Y, whatever that week happens to be. So the question that caused trouble is just this one question, it goes something like this. If you were temporarily absent from the job and why that absence occurred? Now, one of the responses is that you were laid off, whatever it may be, you were temporarily laid off because of the pandemic. If you answered that you were a temporary layoff, then the Bureau of Labor Statistics counts that towards the unemployment rate. If you answered, however, "other," which means that you really aren't temporarily absent in your mind, right? That really you just aren't working right now because your job hasn't called you back yet, and you respond "other" to that. If you respond "other," it doesn't count towards the unemployment rate. And that's what happened, and it's been happening. In fact, the Bureau of Labor Statistics said that because of this mistake, that rather than unemployment going from 14.7 to 13.3, it probably should have gone from 14.7 to 16.3. If that had happened, the market probably would not have rallied the way that it did. Now, why am I telling you this? I'm telling you this because when the stock market rallies almost back to its high based on this information, that is a prime example of emotions ruling what people are doing with their money, and that scares me here. Do I want you to come out of the stock market? Yeah, if you have one year or less that you need this money, you bet you I do. But do I want you to continue to dollar-cost average? I absolutely do. But do I want you to commit large sums of money here? I do not. Got that, everybody? So a few of the lessons that we have learned these past few weeks, what I do with my money, what I do with Colo's money, is not something you should do. I never do 100% of something and I never do 100% of nothing. You have got to know more than what you should buy or sell. So many of you are feeling so good right now because the markets have been going up, but I just want you to think about how bad you felt just two months ago. So it is an emotional roller coaster, so stop it. Stop it. What you need to do is simply, like I said, dollar-cost average. And the next thing is that be very careful about what drives this market because understand, mistakes can be made. News can drive something and before you know it, you find out the news is incorrect and down goes the market. But mostly, I want to say to all of you that I'm going to go back now, starting this Thursday with Ask Suze Anything, about questions when it comes to personal finance. My Sundays will be emotional, sometimes spiritual, sometimes Suze School. But I'm not going to talk a lot about the stock market, you've already learned everything that you need to know. Pease, never forget that the goal, the goal of the Women and Money podcast is for you to be strong, for you to be smart, and for you to be secure, and it's going to take more than money to make you secure. It's going to be making sure that you have the power over the money that you make, that you know what to do when it comes to every aspect of personal finance and that you have control over your thoughts, over your feelings, and over your actions, because never, ever forget: Your thoughts create your destiny and your destiny is going to be now in your own hands. In providing answers neither Suze Orman Media nor Suze Orman is acting as a Certified Financial Planner, advisor, a Certified Financial Analyst, an economist, CPA, accountant, or lawyer. Neither Suze Orman Media nor Suze Orman makes any recommendations as to any specific securities or investments. All content is for informational and general purposes only and does not constitute financial, accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any loss, which may arise from accessing or reliance on the information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss or damages, direct or indirect, arising from use of the information.