Family, Home Mortgage, Marriage
June 27, 2021
Listen to Podcast Episode:
On this podcast, Suze shares a story about a friend who learned the lesson of why letting go of things can lead to financial stability.
June 27th, 2021. Just me today, you get me all to yourselves. And you're probably thinking, yeah, but we like KT. But it's okay because today I want to tell you a story and it's a story that I know that all of you, if you can't currently relate to it one day, this will happen to you. So, I want you to be able to learn from other people and things that happen to other people. So, let's begin today at Suze's Story School. All right, So, I want to talk to you about Pat and Pat is an 81-year-old woman who years and years ago came to see me when I had my own practice in Emeryville, California and she would come to see me and I helped her out. And then a few years later after I started to becoming more of the, you know, quote famous Suze Orman. She got in touch with me and again, I helped her out and now last week she got in touch with me again and again. I totally helped her out, but I helped her out with something that is just so prevalent among women in particular who lose their spouses. And so, Pat lost her spouse, her husband last September and now she's in the situation with when one loses a spouse, they also lose one’s Social Security check, loses his pension check. And truthfully when one loses a spouse, your expenses tend to go up and they tend to go up for many reasons, everybody and mainly it's because normally when there are two of you all right, you're happy to eat at home and be at home together and not have to do that much, you're just happy, you're being together. Hopefully you're happy being together, but that's a whole another podcast and so you don't spend as much money. Maybe one of you is more adept in fixing the car or changing this or doing something in the house or being a handy person around the house and when one of you dies it's very possible. Then you have to spend money to hire people to fix this, to do that, to do this. But really your expenses tend to go up. So, Pat's in this situation where she does own a $2.5 million dollar homes. And the great thing about this home is that pat and her husband bought it like 30, some odd years ago, so they hardly paid anything for it. And here it is now worth $2.5 million. But over the years as Pat and her husband needed money, they would refinance the home. So, she currently has a mortgage on the home of $400,000. And Pat's total income is only $3,000 from her social security and pension. And that is before taxes and that's it. She has $18,000 in an emergency fund and no other money. So again, all Pat has a $2.5 million dollar home that she doesn't want to sell, $18,000 in a savings account, and $3,000 of pre-tax income. So, Pat decided that the best way for her to stay in that house would be simply to do a reverse mortgage. But now Pat is in a dilemma because she knows that Suze Orman hates reverse mortgages, which I do everybody. So, Pat gets a hold of me again and we talk now I have to tell you, I think I said Pat's 81 years of age, but this was the most delightful conversation that I've had in really a long, long time. Pat is so sharp. I can't even tell you, so understanding of everything. Had answers to anything that I asked her financially speaking. And so, I started down this path with her and here was my very first question to her. Why Pat, are you keeping this home? Real estate is that the highest it's ever been. So why do you want to keep it? All right. Everybody, Before I answer as to what Pat said, I want you to think about. Why do you think she wants to keep it? Do you think it's because she loves living there? Because that's where she has lived for the past 30 or 40 years. Do you think she loves living there? Because she wants all her kids to come home and to be able to stay there? Why do you think Pat wants to keep this home? Well, the answer to that question is this because her husband loved that house, he was attached to that house. He thought it was the greatest home he's ever had. So, I said to her, wait a minute, wait a minute. Are you telling me that you are keeping this $2.5 million home simply because your husband who passed away in September because he loved it? And she said yes. I said, oh no, no, no, no, you can't afford to do that. Pat, Real Estate, as I said a second ago is at the top of the market. If we just sell it right now, Pat and pay off the mortgage and the taxes and everything you're going to have probably $1.9 million, after everything plus you are going to still be able to take advantage of that $250,000 exemption that your husband would have added to your $250,000 exemption when it comes to selling a home, because it's within that time frame. She said Suze, there's no way that I could sell this home even if I want to sell this home. My mother was recently ill and I spent the last year or so totally taking care of her. And when she died, I moved everything that she owned into my garage. You can't even put a car in my garage right now because everything is just stuffed with her things. And I said, okay, so how long would it take you to clear out this house? And she said at least a year. Is it a year? I said, Pat, real estate prices could absolutely go down in a year. What are you talking about? And she said, well besides the fact that I have all of my mother's home in my home, I also have 30 years of paperwork and files and all of these things in the other storage area. Plus, I have four cars. I said, you have what? She said, oh yeah, I have four cars. My son was working on this car that's a 1940, whatever she said, it was kind of car. There is two other cars that my husband used to have. I have my car. So, I have all these cars and boxes from over 30 years of my stuff and other homes and everything I had in this other storage area. I said, well why can't you just get rid of it? She said, I've tried Suze, but it's going to take me so long to go through every single box to see what's in there. And then I have to shred it and it takes me so long to shred it and it's going to be at least a year. And I said alright let's stop and let's start with the cars. Why aren't you selling your cars? She said I don't really know how to I mean how do I even go about that? It's where do I, how do I do it? So, I said here's what we're going to do Pat you're going to contact Carvana and you can do it online and if you have your vehicle I.D. Number and a few other you know information or at least the license plate or the last license plate of the car. If they even have one on it, they'll give you a quote for how much they will come and pay you for this car and take the car away. She said I've never heard of Carvana. Now, just let's put a pin in the story for right now and let's talk everybody about Carvana. The best place for all of you to sell a used car right now, in my opinion is Carvana. Now, why do I think that? I think that because a little bit ago I got this crazy notion that after 10 or 11 years of the car that KT and I own, we should go and sell it and possibly get a new car that has all these advanced safety features on it, even though we love our car and it only has 40,000 miles on it. So, I went to the dealership and they told me how much they would give me as a trade in. All right, no problem. It was $21,000. I said, okay, that's all right. I guess for a car that's 11 years old. It's just what they would give me. And then I went back and I went on to Carvana and I put in the vehicle I.D. And all the other information they requested. And the quote came back 25 or $26,000. I called up the dealer that I have known for a long time and I've said why is Carvana willing to give me 25 or $26,000? And you're only willing to give me 21,000? And he said to me, all right, you found out our trick. And I said what's your trick? We take and buy used cars Suze. And we turn around and sell them to Carvana because nobody is paying more for used cars than Carvana. And they just come and pick it up, give you a check and it's just that simple. So, for those of you out there right now who have used cars that you want to sell, maybe they've just been sitting around, maybe you have three cars and you only really need two cars. You need to go to Carvana, online and see how much they will give you. Used cars have never been as high in price. Seriously, it's like real estate they're going for off the chart prices. So, if you have ever wanted to sell a used car now is the time to do it. I'm not so sure it's the time to buy a used car, but it's definitely the time to sell one, right back to Pat's story. So here we are. And I tell Pat all about Carvana and she's just thrilled and she decides she's going to go on the website tomorrow and see how much she can get for these cars and to absolutely sell them that she can do. And I said, okay, Pat, now what about all of the stuff that you're telling me is going to take one year for you to clean out. What is that about? And she said, well how else do I do it, Suze? And I said have you ever heard of a mass shredder? Somebody who comes to your home with a big truck and they just shred everything and it's usually about a dollar a pound. She said that's a lot of money. And I said Pat, that's not as much as you are going to lose if you wait to sell this house for a year or two simply to go through everything. And the other thing is this Pat, nobody wants this stuff that's in your storage bins, in your basements, in your other rooms. They don't want it. Why would you do that to your kids? Look at what you had to do when your mother died. This is all stuff that you don't even want. But you're holding everything because you are emotionally attached to it. So, because you're emotionally attached to these things that are eventually going to become a burden on your children. That is why you need a reverse mortgage. That is why you're going to make one of the biggest mistakes you've ever made. Why would you do that? And she stopped. We were on the phone everybody. So, she just stopped and there was silence. She said, you're right, Suze. I said, and the other thing is this Pat, if you have not opened up these boxes for 10, 15, 20, 30 years and all that's in there is paper. Why do you care? So just call a shredder and have them come to your house and have them do this job. Next, he says, but Suze, there's all this furniture that I have, all these things, even my own furniture. That is really great furniture even though it's really old and I know nobody's going to want it. And so, what should I do with it? And I said Pat, you belong to a church. And she said, oh yes, I go every day Suze Orman. And so now we start talking about this and I said go to your church and ask if there are families there that need things and if they need them just let them come over and take everything that they need to make a massive donation of all those things. And trust me the church and the people who go to that church will find places where people will love this furniture, and all the things that are down there that you don't want anymore. And she said okay, I'll do that. So, in a very short period of time, Pat went from holding onto this home for $2.5 million dollars because her husband loved it, to wanting to actually sell it. So, our next step was alright, you're going to find a realtor who's at least going to come over right now and tell you what is this house really worth? Because if you can sell this house right now, Pat, get rid of everything and put it on the market, then we can decide what your next move should be. And she said, but Suze, there's a lot of things in the house that need to be freshened up and everything before I sell it, I need to put money into and I go, oh no you don't. You're going to sell this house as is. People are so crazy right now that they just want to buy something and they'll fix it up the way that they want to fix it up. So, do not spend money that you don't have to fix up a house. Just tell people the situation, they'll look at it and they'll go okay. So, maybe it's worth 2.5 million. And you say okay, you'll sell it to them for 2.4 million exactly as it is, but you will find somebody who buys it without you having to change anything. So, she says okay to that. So, here's the point of what I'm about to tell you. Pat went from calling me about to sign a reverse mortgage when all she had to do was open up her hands and let go of all this stuff that was holding her down, that was not allowing her to go on and to create the future that she needs to create for herself. Because the next part of this conversation was this, Pat, you are 81 years of age and 81 goes to 91, goes to 101 hopefully. But somewhere in there it is very probable that you're going to need help to take care of yourself. God willing, I hope you never have to do that. But you probably will. So how do you feel about taking some of the money that you get from the sale? And let's look into going into an independent living facility for yourself that also has skilled nursing care, if you ever need that. And she says to me, I would love to do that. Oh my God, do you think I have enough money to do that? And again, we went through what would happen if she sold the house? And the answer was absolutely she would have enough money and she would have more than enough money so that she could really live a life without having to worry and know that no matter what happens, she would always be taken care of. And she would have friends around her. She could eat in her own apartment if she wanted to, or she can go and with everybody else. But she would truly be independent, financially secure and free. Well, by the time this conversation was over, I sent her a whole bunch of notes as to everything that we talked about, what we would do with the $1.8 million. And the next day I got an email from Pat, a totally different email, an email of a happy woman, a woman who was in control. A woman who knew what she needed to do for herself versus a woman that was hanging onto the past. A woman who was letting the past drag her down because emotionally speaking, she thought it was better for her to be honorable to those that weren't even around anymore than being honorable to herself. Which is the reason that I wanted to do this podcast today. It is essential. Everybody. It is essential that you stand in your truth as to what do you need to take care of yourself, especially after your spouse has died. So many of you do this with the stocks and the investments that your spouse has purchased in the past. And so, they've taken care of the money and then they die. And now you have a stock portfolio of all these stocks that probably should be sold. But you don't want to sell them. Why? Because your husband or your spouse loved them. I am asking you not to do that. That is not what your deceased spouse would want you to do. If you were able to speak to them. They would say to you, are you crazy? You should absolutely sell and buy something. That makes sense. This company no longer is what it was when I purchased it. Do not get attached to these things. These things that will not bring your spouse back, but very possibly could put you in a situation where you end up in the poor house. So that is the podcast today. I still don't know exactly what I'm going to call it, but I want you to really think about this and I want you to even look around your home and what are you keeping just because you bought it and it's there. But even though you don't use it, can you get rid of the clutter that is in your house? Can you get rid of things that you don't use that are in your house? Can you just free yourself up from the past? The past that is holding you down and the past that is keeping you, in my opinion, from possibly making the most out of the money that you have. So that's it. But I do want to say one other thing in this podcast. Last February I told all of you about how I had purchased a stock by the name of Microstrategy's and that was my way of playing Bitcoin. Maybe you remember that I told you that or maybe you don't but here's what I want to tell you. And I went on many television shows and everything telling them that as well. But I had told everybody that I purchased that stock around my birthday at about $125 a share. And then I sold it in February the next year at about $1,035. And then a reporter from the Washington Post called and said are those the true date? Suze is that really when you did it? So, I called up my financial advisor and I said John can you just tell me when I actually purchased Microstrategy's and when I actually sold it, and really, I purchased it on August 17 of 2020 for $145 a share, not $125 a share. And I sold it February 17 for $917 a share. Now that's still 430% gain. But I just want to set the record straight. So, somehow, I totally mixed up when I did something. Although I have to tell you, I'm totally shocked that less than a month after I went through that major surgery, that I was literally trading a stock or buying a stock. But what can I tell you, I obviously was. But I always want to make sure that everything I say is grounded in the truth. So, I made a mistake in terms of the dates that I bought something and the prices, but still, it was a tremendous gain of approximately 430%. So, now I've set the record straight. All right, everybody, are you looking forward to KT coming back on Thursday for ask KT and Suze anything? I hope you are. But until then, I hope you all remain safe, strong, and secure. And we'll see you soon. Bye bye.
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