Interest Rates, Loans, Retirement, Trust, Will
September 27, 2020
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On this podcast, Suze shares three powerful stories from people in her life. We get lessons on confirming and clarity, how less can really be more, and why planning is so important.
Suze Orman’s Women and Money podcast is proudly sponsored by credit unions; a safe home for your money, rain or shine. September 27, 2020, Suze O. here and welcome to the Women and Money podcast as well as the men smart enough to listen. Before I do anything today, I have got to wish my niece, our niece, KT's and my niece, Sophia Rase, a happy 21st birthday. Do you remember when you turned 21? A long time ago for some of us, but anyway, Sophia, I just want to say I love you so much. You know, your Aunt Kathy loves you to bits, just loves you up, and we hope that you are having a great, great day. Tomorrow, as well, is my great-nephew's 12th birthday. His name is Oliver Tandy and Oliver, remember a year ago on that date, we were all in New York City celebrating? So, on my Women and Money app, I put a picture of your mom, my niece Alexis Tandy, KT, you, and me for everybody to see. And again, for those of you who don't have my app, the Women and Money app, just go to Apple App Store or Google Play, search Suze Orman and download it. And we have one more birthday. I know, the family is growing here, and it's actually Oliver's sister, Scarlett Tandy, my great-niece, who is going to be 10 years old on September 29. Do you remember last year, Scarlett, for your birthday, do you remember what you got? If you want to be reminded of it, you might want to go to the Women and Money app and I have a little video there of what I actually gave you and what I gave Oliver last year. My, time flies. Anyway, Sophia, Oliver, Scarlett, Aunt Suze and Aunt Kathy wish you a very, very happy birthday. This morning, as I'm sitting here about to record the Women and Money podcast, my mind is racing and it's racing because there are so many things that I want to talk to you about. So many it's not even funny. For some reason this week I've gotten the most interesting as well as really horrific calls from people that I'm really close to and the things that happened in their lives, and I'm sitting here going, how could that have happened to you? And they're all calling me, asking me for help, and of course, there's nothing I can do except console them because when some things already happened, it's already done. And when something's already done, there's very little that one can do about it. So I'm thinking, should I tell those stories and the lessons that I've learned from there? Should I tell things about me and KT? Should I talk about... What should I talk about today? And then I've decided, I know, I'm going to do like a little financial smorgasbord, and I'm going to talk about a lot of things today, and I'm going to start with, actually, Travis, Sophia's brother. So, last week I decided to write Travis an email, sent him an email, and asked him, how much does it cost you a month to live on? What are you doing? Talk to me about your money because he graduated college in May of this year, and he's now essentially about to be out on his own, so we're talking about what does he spend money on? I want to know, what does he bring home and what are his monthly expenses? So he talks to me about that via email, and we're going over it and while we're doing this, he says to me and Aunt Suze, how much do you think I should be paying on my student loans? And I said, well, tell me about your student loans. And he says, well, I have $45k on a Sallie Mae loan and I have $7500 on a Stafford loan. And I said, OK. I said but before I could tell you how much you can pay on your student loans, I need to know what else we have. Do you have a retirement account, do you have an emergency fund? I need to know everything. So, we go through every ounce of his expenses and after fully funding a Roth IRA after, you know, putting up to the point of the match in his retirement account at work, after putting money away monthly for an emergency fund, all these things, he still has about $1k leftover and that's after taxes. So now, I'm like all right, we have $1k that we can now put towards your student loans. Next question is, well, which one should I pay off first? So of course he told me he has a Sallie Mae loan at about 7% and he has a Stafford loan where he's not having to pay interest right now. And I'm like, well, if it were up to me telling you, I would put us much as I possibly could towards the 0% loan because they're not charging you any interest right now, so every penny that you put towards it is going to pay it off and you very well could possibly be paid off in full before you have to start paying on your Sallie Mae loan. And he says to me, but Suze, I'm paying 0% on both of them. I'm like, what are you talking about, Travis? This is all email. I said there's no way you're paying 0% on a Sallie Mae loan, only on your Stafford loan. And he says, no, that's not true. President Trump, (Can you imagine telling me something's not true when it comes to money? That is, besides the point.). Then he tells me that, no, President Trump signed into law that student loans were all at 0% until December 31 of this year. And I write him back and I go, no, that is not true, it's only for federal loans, private loans still have to charge interest. Maybe they can work with you a little, but that interest is still being charged to you. He writes me back, and he says, maybe you're right, maybe it is just federal loans. However, Sallie Mae, I am telling you Aunt Suze, is at 0% until January 3. And I write him back again and I said, I don't believe it and he said, I'm telling you, I checked it and that's how it is. So, now I'm doubting myself, believe it or not. So I write my go-to man Mark Kantrowitz at SavingForCollege.com. I've always told you he's the world's expert when it comes to student loans or how to save for a college. I tell him the story and he writes me back and says, no, he's got to be wrong, that's impossible, it's not true, and he goes into this long explanation as to why, which I already knew. I then forward that to Travis and then later on, I get an email saying you're right, their website is very confusing, I am paying interest on it at 5.5%. And I said, OK, I get it, Travis, but here is the lesson that you need to learn from this. You always have to check, double-check, be clear, crystal clear. So why am I telling all of you this story? So many of you, really, you write me and you are adamant about something works this way that I got something wrong that it's not this way that it's that way and you go on and on about it. And I know without a shadow of a doubt that you are 100% wrong. But you don't want to believe me, you want to believe what you want to believe just like Travis wanted to believe what Travis wanted to believe because he wanted that to be true. And when it comes to money, because I'm telling you, I'm going back to Travis here for a second. This boy is bright, he is brilliant. He works with computers, I've watched him now and what he does, and I am telling you there's no way he couldn't have understood that. But when it comes to money, we somehow just go ditzy in our heads. We don't want to deal with it, we don't like it, we just want to go forget about it, so we think we know and then we move on. The great thing about Travis is after I wrote him that email, he wrote back and he said yes, lesson learned. But you aren't learning your lessons, you still continue to make the same mistake over and over again. You're especially making mistakes with what? Universal life products. You so want to believe what your financial advisors that are selling you these products are telling you and how they work that you're just putting your money in there and one day you are going to be so, so sorry that you did. The next story is about me and KT, and this one is about when less equals more love. KT, that you all adore and that you absolutely want on Thursday Ask Suze Anything podcasts, oh my God. She's now just like walking around going, they like me, Suze, and I feel like saying, yes, they like you, they like you a lot. But anyway, so KT loves to cook, and KT loves to feed people more than anything in this world. And while I love to eat, I also don't like to gain weight. And I liked that I had finally reached a weight, and I don't mind talking about weight just like you shouldn't mind talking about money, where I was at 147lbs, I'm 5'5," 147lbs and I was like, oh, great, maybe I could get to 140, I would love to weigh 140. I'm really happy about this. And now you know, I'm able to eat again and do things again, and my appetite has come up from a little while ago where I, you know, had had that surgery. And so I'm eating and eating, and I keep saying to KT, don't put so much on my plate. Don't feed me so much. And like the other day, you know, KT made chicken and this is healthy food she's making. And normally, I just take one thigh and I put it on my plate and that's it. I'll have some vegetables. But KT was serving and of course, she put two thighs on my plate and of course, I ate both thighs. And then the other day she was making breakfast and I love when I have a bagel and this cream cheese on it and tomatoes and onions and sprouts. And it's a special cream cheese that's made out of coconut because I really don't like dairy. And KT says to me oh Suze, we're all out of that, and it's not like you could just get it on the private island here. And so I said, it's OK, just put a little butter on it, no big deal. And she serves it but it's got like a half-inch of butter on it all around the bagel. And I'm sitting there thinking, no, KT, that's so much fat, don't do that to me. And the story could go on and on like that. And finally, I sat down with KT and I said, KT, you have got to understand that less food equals more love, and I want you to think about what I just said. Less food equals more love because so many of us have this thing in our head, the more we give, the more we do, the more we serve, that's what shows people that we really love them. But I don't want more food because why? I got on the scale the other day and I wasn't 147 anymore, I was 153 and that upset me. And it didn't upset me that KT was doing that to me, it upset me that I didn't have the discipline to only eat what I wanted to eat, not what I was served. And then I started to go off on this entire thing about when does less equal more love? And when I talk about love, I'm not talking about love for others necessarily. I am now talking about love for yourself because the truth of the matter is, KT needs to lose weight as well. Absolutely she does. So the love that I'm talking about right now is self-love. So then I started to think about what else can we do less of that equals more love for ourselves? And I started to realize, you know, less spending. If you spend less money, that equals more love for you as well as your family, especially if you don't have an eight-month emergency fund, especially if you aren't contributing to your retirement account. But you still are loving to spend money. You're at home, you're bored, you're spending more money on Amazon. All the restaurants and everything in certain states are opening up. You're going, we'll have to go out and spend more money on those things, so less spending equals more love. Also, less self-doubt equals more love. How many calls have I gotten this week from people doubting projects that they are working on? They were doubting themselves, and I'm talking to them saying, are you crazy? These are some of the best ideas I've ever heard, who is getting you to doubt yourself? And it's not just about products or projects, it's about a relationship, it's about how you feel about something. It's about you knowing something and others are getting you to doubt what you know so less self-doubt equals more love. Less procrastination equals more love. So many of you procrastinate when it comes to your money. You procrastinate, you think, oh, I have time to do this. I don't need to open this, I don't need to get that divorce right now. You procrastinate, you put things off, and when you put things off you're putting love for yourself off. When you procrastinate, you know you have to do something but yet for some reason, you're just not doing it. And are you not doing it because you have self-doubt? Self-doubt about your capability of doing it. Are you just not doing it because you don't want to have to deal with what it takes to do it? When I'm talking about self-love, self-love equals self-worth, and self-worth equals net worth. So, you have got to understand that you can't procrastinate, that you have to really love yourself enough to take action. Less denial equals self-love, less lies equal self-love. These are all things that I just want you to think about because the real goal of the Women and Money podcast is for you to be more and therefore have more, and the only way that you can be more is if you have self-love. The last thing that I want to talk to you about today because I have so many more, but I'm going to run out of time here, is that I got an email from a really old friend of mine. And in fact, I had been in a relationship with this woman way back in the seventies for quite a few years, and we're still really good friends to this day. And she writes to me and she says, Suze, I really need your help. And essentially what she said to me was she said, my best friend, who's been living with her girlfriend for 28 years, her girlfriend just fell off a ladder and died. And so she said, I really need to talk to you but I don't know how to get a hold of you. So, I immediately sent back my phone and she called me right away and we talk about what's happened and how sad this is. So I say to her, what is it that you want me to do for you? And she said, we don't know who to turn to and you're the only one we know that can help us. And I said, well, in what way? And she said, well, we all live on this property that's worth about $ 1 million. I have a little cottage in the back and the two of them lived in the house in the front, and the entire property was in the name of the woman who died. The woman has two children and the woman did not have a will, did not have a trust, did not have an advanced directive, or a durable power of attorney for healthcare, and it is in the state of California. And I said and what is it that you want me to do? And she said, please just tell me what's going to happen now. So I need all of you to think about this. This woman, her best friend, lover of 28 years, has just died, and they're spending time calling me to now figure out what's going to happen to the property that was in this woman's name who died without a will, a trust or anything that they all still live on. And then my friend says to me, we're so afraid to call you because we knew better. You're going to yell at us, you know? And I went, I'm not going to yell at you, I said, but here's the problem, I can't help you. Let me tell you how the laws of California are going to go. When you die with property in an individual name like this situation, and the woman who died doesn't have a spouse because they were just girlfriends, and the state of California doesn't recognize common law marriage. But in the state of California, if you are not married and you have children, everything goes to the children if you don't have a will or a trust. They also, as I said, did not own it in joint tenancy with right of survivorship, it was held in individual name. And not only is that how it will go, but probate fees to probate just this house alone will be approximately $40k set by statute in the state of California. I tell you this story because, again, here is another situation, kind of like the Life of Flowers podcast that I did a little bit ago, that there's nothing I can do about it. And, given that I just mentioned the Life of Flowers podcast, I have to just give you a little bit of an update there. So this was a podcast about a friend who died by the name of Bill Summerlin. And he died without a will, a trust or anything, and everything was just in his name. And now, his family members have absolutely no access to his bank account, they can't terminate his rent, his cable, his phone. They can't get to anything until his estate goes through probate. So, this family, I want you just think about this. How many of these things are set up on automatic payment from Bill's bank account where the money is just going automatically and nobody has the right to turn off anything? Really everybody? And I get that I have absolutely been talking about the Must Have documents a lot lately and the reason that I've been talking about them a lot is because a lot is happening and everybody thinks nothing can happen to them. Our next-door neighbor here on the island, the captain of the boat had an 18-year-old son killed in a motorcycle accident last week. Another family had a 27-year-old daughter killed in a car crash last week. The security guard on the island that we talked to that night, something happened to him and he was found dead the next morning. And I get these are not great stories to be telling, but they're not stories, their people's lives and these lives now of people that know these people and family to these people. These people are suffering now, and they're not just suffering because of the loss of a loved one, they're also suffering because of the loss of control that they have now over having to deal with the loss of a loved one. And I don't want that to happen to all of you. And I don't want you to live a life that if something like that happened to you, that you would be writing to me, saying, help, help, I don't know what to do. After something is done, there is nothing I can do. But this is an opportunity now for every single one of you to get your acts together. What I love most is my sister-in-law, Lynn, and Tom, who did their trust 10 years ago after listening to this and seeing what everybody went through, they realized they had never funded their trust. They had never transferred the title of their home and everything else into the title of the trust. So now guess what they've just done? They've redone their trust, they've funded everything, they got everything witnessed and notarized. Everything now is taken care of and they feel so much better because they had procrastinated. They didn't know what to do, they had self-doubt about it, but it was always in the back of their minds. And now they're free because they've done what they needed to do. My brother-in-law, John, the same thing. He's now taking care of every part of his business and it's not, does he have money, does he not have money? He now has an advanced directive and a durable power attorney for healthcare so that if anything happens to him, we can take care of him health-wise and make decisions. These are things all of you need to have. Listen, everybody, I tell you these life stories in the hopes that no matter how right you think you are that you always check, double-check, and be clear and crystal clear. Because if you think you're right and it turns out you were wrong, it could cost you in every possible way. I tell you these stories so that you never forget that less really can be more. More love for others, more love for yourself, and really, even more love and respect for money. And last but not least, and really above all else, I tell you these stories because I want you to always hope for the best and plan for the worst. I am begging you to do everything you can do today to protect your tomorrows. Because here's the bottom line. I simply don't want these stories or any of the thousands of life stories that I hear all the time to become any of your realities. 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.
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