Mortgage, Retirement, Spending, Stock Market, Stocks, Women And Money
September 20, 2020
Listen to Podcast Episode:
On this podcast, Suze reflects on the life of Ruth Bader Ginsburg and how our world has turned upside down. What can we do to make sure we’re strong emotionally and financially?
Suze Orman’s Women and Money podcast is proudly sponsored by credit unions; a safe home for your money, rain or shine. September 20, 2020, this is Suze O. and you are listening to the Women and Money podcast as well as the men smart enough to listen. On some level this weekend, I feel as if our world really has been turned upside down because on September 18, the first night of Rosh Hashanah, so, kind of it was appropriate. Um, we lost maybe one of the greatest people of our lifetime and that was Ruth Bader Ginsburg, the second woman appointed to the Supreme Court. And Ruth was really an incredible woman because against all odds, she fought for what she believed in, she wasn't afraid to face what the future held and she went for it with every ounce of energy that she had. Even though as she was getting older, she kept getting cancer, she fell down, she broke her ribs, all these things would happen to her, but nothing could stop her until now. And I think for all of us there are a lot of lessons that we can learn from Ruth Bader Ginsburg, not only in her life but in her death as well, because she will have left a legacy that will affect all of us in really great ways, hopefully for years to come.So, it's as if the world has been turned upside down with us losing one of the greatest women, greatest people actually, of all time. And so I started to think about this, that how of our world's been turned upside down, not just with the passing off RBG, but with what's happening in our lives. And it's almost as if what can we do to prevent that really from happening, from our world really being turned upside down, where we cannot write it? What can we do in our own lives to make sure that we're always strong financially and emotionally speaking, that we're always taking the right actions that we're always doing that which we know we need to do? But then there's the problem. What is it that we need to do? It has greatly concerned me lately that I'm finding a lot of people are taking actions because they are financially feeling better and actions that I'm afraid may very well hurt them as time goes on. And what are those actions? Well, a lot of people are going back to work, interest rates are at an all-time low. It is very possible right now that you could get a 15-year fixed-rate mortgage on your home for 2.37%. That is essentially, after a tax write-off, nothing. So what do I find that people are all of a sudden doing that I did not see them do for a long time? They're literally looking for new homes, larger homes than they currently have, because why? They say to me, Suze, now I can buy a new house, I could finance it, and even if it isn't at a 15-year fixed-rate mortgage, at a 30-year fixed-rate mortgage for maybe a half a percent more, and I could get the house that I've always wanted. Please underline the word wanted there in your minds everybody. That I've always wanted, and it will cost me the exact same thing that it's costing me now for a little house that, you know, meets my needs but it's not what I really have wanted. It's almost as if people are saying, oh, I can now live my dreams, now I can do that. I'm finding people telling me that they're going to buy a brand new car. I'm like, and why are you doing that? Because interest rates are so low, I have my job back, I feel really good and I want to reward myself with something. And yet, when I ask a lot of these people questions and maybe you're one of these people, and I asked you the question well, are you fully funding your retirement account? If you refinance your house and you refinance it for 15 or 30 years, what does that mean to you? Will you have it paid off by the time you are in your 60s, which you know is my goal for all of you? And they usually answer me to those two questions with well, you know, my employer stopped matching my 401k contribution, so what did I do? I stopped contributing. And I'm like, really? Oh, Suze, it's OK, I'm going to work forever, I don't have enough money in retirement anyway, so why not just keep working until the day that I die? Kind of like Ruth Bader Ginsburg did. Well, the difference for many people between you and Ruth Bader Ginsburg is she had a serious sum of money that she had saved and created and was in a very different circumstance. She worked because she wanted to, not because she had to. So, if you find yourself in a situation where you think you're going to work the entire rest of your life because you have to not because you want to, you then are entering into a situation where, if you are taking actions today where you're buying a new house, buying a new car, not putting money in your 401k plan, you are voluntarily entering your world that is going to be turned upside down sooner than later. Now, why do I say that? I say that because when interest rates are low and when things are starting to come back a little, it doesn't mean they're coming back a lot, and there are so many of you out there that you're still on unemployment. You still don't have a job, you still may be evicted, you still don't know how you're going to pay your student loan payment back at the end of this year and you're not in a good situation. And for those of you in that situation, your world has already been turned upside down. And then, as I said, there are some of you who are getting your jobs back, you feel better, you don't really need unemployment to make it anymore and you're just living your life as if everything is turning back to normal. Here's what I need to say, and this isn't easy for me to say because I want you all to feel positive, I want you all to feel powerful, I want you to all feel like your world is one where you are standing on top of it, nothing is upside down and you have control over it. I want you all to be powerful enough to truthfully own the power to control your destiny. I want that for all of you, but for that to be true, you have got to make wise decisions today to protect your tomorrows. And even though I know interest rates are low, there are great bargains out there, you can do all kinds of things. The question is, should you? Some of you, possibly you should, but for the majority of you, you should not. And why is that? This is the time when everything is starting to feel just a little bit better now that you need to hope for the best but plan for the worst. And the true thing that I think that is going to turn this world upside down isn't the pandemic, it's already done that. Its technology. That's right, technology and artificial intelligence, it seriously scares me. And I've told you this before that many corporations, many employers, have figured out that why should we have human beings do work when human beings get sick? Human beings, you know, require health insurance, they require all these things that if we can have robots or artificial intelligence or whatever it may be, do the jobs of human beings, we're going to save a serious sum of money in the future. We're not going to have to be what? Shut down with a pandemic because our machines could still go to work, we don't have to worry about it. I mean, what if McDonald's put robots in every single McDonald's through the entire United States, even the world, for that matter? And you drive up and you just say what it is that you want or on your little app that they have, you order what you want, you then pay for it on the app. You then drive up and you get it and it's right there, you never see a person, and you just drive off. How many millions of people would that put out of work? And the real people that I'm worried about are those that don't have white-collar jobs because those are the people that are going to be affected the most if you ask me. And I know that there are a lot of people out there that say, oh, Suze, we've gone through all these years were technology and automation has only enhanced productivity, it's never replaced human beings. Well, I hear that, but this is a different type of technology. This is a different type of lessons that many corporations absolutely learned through this pandemic, and now we are progressing into an area where, if productivity really does increase, which it will, then do you really need as many people doing a job since one person now is more productive because of maybe artificial intelligence? So, do you need two or three people to do that same job? Now with the aid of artificial intelligence, only one person needs to do it? So, this is not the time for you to be buying a bigger house just because you can and interest rates are low. This is the time that if both of you, let's say you're married and you're in a relationship that you now both have income coming in, can you try to save one income? Can you try to live on just one income? Rather than expanding, can you contract? And the real question is, seriously, is when do you buy what you need versus what you can afford when you can afford more than what you need? My entire life, and I know I am repeating myself but I need to repeat myself from past podcasts because I don't like what I am seeing. I don't like that even people, my relatives around me, are making mistakes, in my opinion, financially speaking. Some of them, obviously not all of them. And so the question again is, when do you buy what you need versus what you can afford when you can afford more than what you need? This is not the time to be buying new cars simply because you can. This is not the time to be upsizing into a home just because it's going to cost you either the same as what you're paying now or less. This is the time that you save money, that you get yourself out of debt, you shorten the term of your loans, you make sure that everything is going to be paid off by the time you are in your 60s. You know what's fascinating to me is that The Ultimate Retirement Guide for 50+, which is a book that I wrote, my New York Times bestseller, my 10th New York Times bestseller, all of a sudden has picked up dramatically in sales, and I'm wondering what is going on here? I'm looking at the number of reviews that that book has, the last time I looked at it, it was, you know, approaching 1400 reviews, and I look at all my other books that I've written, and I've never had 1400 reviews on a book before. And that's because there are people out there that really need to know what should you do with your retirement now? And if you're 50 what should you do when you're 50, when you're 60? You need to know, and so there are people that are interested in that out there, and that makes me so happy. But then, on the other hand, I'm seeing so many people act really foolishly because they think everything is great. Don't you understand that the reason that interest rates are so low and that they're going to stay so low is because of how bad our economy is and the lower interest rates are, the higher our debt goes for the United States and who knows where that leads? So, you have to be smarter than that. You cannot be enticed by the glory of bigger homes, the glory of newer cars. You have to live below your means but within your needs. And if you lived a simple lifestyle like that, your world would never turn upside down. I'll never forget sitting in a meeting years ago at Conde Nast magazine, this is so many years ago. And there were a few really wealthy people in that room, and one of them was being so honest, saying I could barely afford my lifestyle and I was like, how is that possible? And then they went on to say, well, they had two planes, three yachts, four homes, and all of these things. And that's when I really learned, oh, I don't ever want to be in a situation like that. I never want to be in a situation where I can't live the lifestyle or even if it's just meeting my needs that I need to be able to live. And that's when I decided not to spend a lot of money and to really save no matter how much money I was making. And even just the other day, KT was saying to me, Suze, we need a new bag for one of our hampers. So whether the laundry bag is inside or outside, ours happens to be obviously inside, your clothes have salt on them. There's a lot of salt all-around when you live on a private island, and the inside of the bag started to have the black, because it's a black bag, the blackness started to little chip away whatever it was that the bag was sealed with. And KT said, can you get me a new bag? So I go online and I look and it's $58 and I say to KT, honest to God this was just yesterday, I said to KT, all right, I'm going to order it for you, it's $58. And KT says to me, there is no way that I am spending $58 on a laundry bag. I'll just use that one to keep the dark clothes in, and I'll use the other one that isn't shredding to keep the light close in so that the black specks don't stain the lighter clothes. And I go OK. $58. KT, as you know, we still watch every single penny that we spend because if you cannot value money and a penny, a dollar, $10 is money. If you can't value that, you can't value your own life since you know, I think you and your money are one. And I know a lot of you will go, that's the most ridiculous thing I've ever heard. It's not about the amount of money, it's about how do you value money, and how do you not get into this unconscious state of interest rates are low, the price is low, I can just do it. It doesn't matter if you can do it, the question is, should you do it? Now, obviously, $58, $5800, $58k would not turn our life upside down. But what turns your world upside down is when you don't take the time to stop and think about the future. Will your house be paid off by the time you retire? So, I get it, a lot of you are refinancing now and a lot of you are buying new homes now because you can. But you're going to be 85 years of age, you're 50, 55 years of age when you're doing this 30-year mortgage, you're going to be 85 years of age by the time that house is paid off. Really everybody? Really? And you know what else drives me bats? Lately, I have been reading, and I shouldn't do this, I've been reading a lot of what other people are saying, pundits and everything, about when interest rates are so low why in the world would you pay off your home? You would be far better investing that money, and then they give you all these charts and all of these things. Can you all never forget that the key to not turning your world upside down is to understand that the goal of money is to make you feel secure, for you to be secure? It's not about how much money and what's the best thing to do with your money, it's about what is the best thing to do for your life, your life, so that you can have freedom so that you can enjoy things not so that you can have more money. It's so that the money that you have makes you feel secure. Me personally, I'd rather live in a tiny little place that I own outright, with no debt, with whatever it may be, a car that's really old that, you know, I've been fixing up, and that makes sense and money in the bank and a retirement account and just know that if something happened to me, I would be OK, than to have all these obligations. Have we not learned about what financial obligations feel like when you don't have the money to pay for it in the past year? And the stock market obviously is going up and down, up and down. It's going to be rocky here for a while, that we knew. The tech stocks that all of you all wanted to jump in on are coming down, brings me back to a podcast that I did a few months ago where, do you remember, this person wrote to me and said, I have Netflix stock, it's the only stock I own. It's been going up and up and up, what should I do? And here we are, Netflix has been going down and down. Amazon is coming back down again, even though I love Amazon. So things go up, things go down, but your life should not be going up and down, your life should not be a roller coaster. Your life should be one that's filled with equanimity, that it's just simple. So I know I'm going on and on about this because I am concerned about the future of jobs in the United States of America as well as the world, everyone. So in order for your world not to turn upside down, and I understand that I have done many podcasts on this and what kind of jobs you might want to think about for the future, is it worth going to a university and paying $50k a year for a job or a career that might not even exist? So what might you think about? But I have to drill this, in my opinion, into your head because I don't like what all of you are writing to me, telling me how proud you are. It's not about you being proud of what you have, everyone. It's about being proud of who you are and how you feel about yourself. For you to be able to define yourself to you and not having to define yourself by the things around you. It's really just that simple. Those things will come and those things will go, but who you are and what you've done in your own life and your life that touches others is what really matters. The other day, again, I was being interviewed and, yes, I'm interviewed a lot, I am Suze Orman, you know. And the reporter said, Suze, out of everything that you've done in your life, what is the thing that you are most proud of? And I said to him, I said, you know, it's funny, I could tell you most of you would think I would say, my Emmy Awards, My Gracie Awards, being named to the Times 100 List, twice, which names the top 100 most influential people in the world. Being named to Forbes 100 Most Powerful, or Barons, or this, or PHDs, or whatever it may be. But I said, the thing that makes me most proud is the people who I've contacted one on one, and you all know who you are, that we're in trouble, that needed a helping hand of somebody to just reach out to them, to hold them up during a time when they couldn't hold themselves up. Why? Because their world had been turned upside down, whether it was divorce, or an unexpected death, or an illness, or whatever it might be. Things that nobody ever would have known that I did and who those people are, but I know who those people are, and I've never forgotten one of those people. And it's reaching out to those people and seeing their reactions when they go, is this really Suze Orman? And watching them change their lives and turn their worlds right side up as time has passed that I'm really most proud of. And I have a feeling that if you were to look at your own lives, you would probably feel that as well. I'm sure Ruth Bader Ginsburg felt proud of the legacy that she left that touched people's lives. I'm sure that was the thing that made her the happiest and the things that she believed in. So, I end this podcast essentially where I began. Where the world, really, is upside down right now because we lost, again, in my opinion, one of the greatest people that really was on this planet. And so maybe, just maybe, in honor of her, maybe we could honor ourselves the way that she honored herself and that we can make decisions that are really good for everybody as well as they are for ourselves. You know, I read a newsletter every single Friday, and it's from my friend John Mauldin, and it is called "Thoughts from the Front Line." You might want to look it up, it's absolutely free. And John really is one of the more brilliant, brilliant economist financial gurus of our time. And he started out Friday's newsletter, because it comes out on Friday night, with this: When Cornwallis surrendered to George Washington at Yorktown in 1781, tradition had it that the British band played an old English children's folk tune called "The World Turned Upside Down." And these are the words of that tune: "If buttercups buzzed around the bee, if boats were on land and churches on sea. If ponies road men and if grass ate the cows, and cats should be chased into holes by the mouse. If the mama sold their babies to the Gypsies for half a crown, if summer were spring and the other way around, then all the world would be upside down." Well, that's why I named this podcast "The World Turned Upside Down." May you think about things before you do it, may you think about the future before you live it, may you act out of consideration of doing what you need versus doing what you can afford. Can you help others that are around you if you can afford to do it if they really can't help themselves? Can you really try to do everything, not only in your own world but in the world of others as well, so that your world and the world of others is never ever turned upside down? Hi, I'm Sarah, and I'm Robert, and we're back here to tell you that Alloya's member credit unions are so proud to have brought you this episode. You know, Robert, credit unions live by a people helping people philosophy. Absolutely, Sarah. And that means when you bank with a credit union, you can trust that they have your best interest at heart. The fact is, regardless of circumstance, a credit union will have your back and keep your money safe, that's the credit union promise. Go to www.MyCreditUnion.gov to find a credit union that fits your needs. That's MyCreditUnion.gov. 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.
To Become A Must Have Documents Suze Ambassador, CLICK HERE.
JUST LAUNCHED! Join Suze’s Women & Money Community for FREE and ASK SUZE your questions which may just end up on her podcast!
To ask Suze a question, download by following one of these links:
To find the right Credit Union for you, CLICK HERE
Credit & Debt, Saving, Investing, Retirement