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Transcript

There Is No Such Thing As A Free Lunch · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:08
  Suze: June 28th, 2026. Welcome everybody to the Women in Money
• 0:12
  Suze: podcast and everybody's smart enough to listen. Suze O here and...
• 0:18
  KT: KT...
• 0:20
  Suze: Is in the house. And you may be wondering, but it's Suze School,
• 0:23
  Suze: why is KT here
• 0:27
  Suze: on a Sunday, which is when Suze School normally drops?
• 0:31
  Suze: So here's the lesson for today. Ready for it? Tell them, KT.
• 0:36
  KT: OK. Last Thursday we told you we had an announcement. Well,
• 0:40
  KT: here it is, everyone. Starting today, on Sunday, Suze and
• 0:46
  KT: I will do our podcast together. This is our new
• 0:49
  KT: schedule for summer. It's called Summer School with KT and Suze.
• 0:55
  Suze: And really it's a combination of Thursdays and Sundays that
• 1:01
  Suze: we will do today. We will not be doing new
• 1:04
  Suze: drops on Thursday anymore.
• 1:07
  Suze: Right, because why?
• 1:09
  KT: It's summer.
• 1:10
  Suze: It's summer. That's the only reason it's summer, and, and
• 1:14
  Suze: we don't wanna be at a schedule anymore.
• 1:16
  KT: No, it's our best reason. However, Suze did say, KT, if
• 1:20
  KT: something comes up in the middle of the week or whatever,
• 1:23
  KT: she absolutely will use this time to focus on a
• 1:28
  KT: Sunday school if needed, if needed, but this will be fun.
• 1:31
  KT: We're gonna have a lighter and fun summer schedule.
• 1:36
  Suze: So, every Sunday now is when we will drop a
• 1:40
  Suze: new podcast. Don't look for it on Thursdays because it
• 1:44
  Suze: won't be there anymore. Robert, what are we gonna do
• 1:47
  Suze: for those people who aren't listening to this? You're gonna
• 1:50
  Suze: have to maybe on Thursday, I'm now talking to Robert,
• 1:53
  Suze: the producer, right? You're gonna have to put something...
• 1:55
  KT: Make a little announcement.
• 1:56
  Suze: Announcement on it when they go on Thursday.
• 1:58
  KT: The girls have gone fishing. Tune in on Sunday.
• 2:03
  Suze: But anyway, I hope you understand. I hope you are
• 2:06
  Suze: happy for us. We're so happy. So KT, what do
• 2:10
  Suze: you got for me today?
• 2:11
  KT: Well, the first one, this is something I wanna share
• 2:13
  KT: with everyone. It's a thank you, a thank you to Suze.
• 2:17
  KT: She said, I'm writing to simply say thank you. About
• 2:21
  KT: 14 years ago, I followed your advice and invested in
• 2:26
  KT: a low-cost index fund.
• 2:28
  KT: Contributing to it every month at the time I was
• 2:33
  KT: far behind in my retirement savings and worried I would
• 2:37
  KT: never catch up and would end up very poor in retirement.
• 2:41
  KT: I wasn't a financial genius. I just had the good
• 2:45
  KT: fortune to hear your advice on one of your TV
• 2:48
  KT: shows and the intelligence to follow it.
• 2:52
  KT: That one decision made all the difference, Suze. Today at
• 2:57
  KT: age 65, I have accumulated more retirement savings than the
• 3:03
  KT: average person my age.
• 3:05
  KT: Something I never imagined would be possible back then. Following
• 3:10
  KT: your advice to invest consistently in a low cost index
• 3:14
  KT: fund was the single best financial decision I ever made.
• 3:20
  KT: I can't thank you enough for the positive impact you
• 3:24
  KT: have had on my life. With immense gratitude, Susan. Thank you, Susan.
• 3:30
  KT: That's sweet.
• 3:31
  KT: It's really true, everyone. I mean, listen, 14 years ago,
• 3:36
  KT: so time is our best ingredient.
• 3:39
  Suze: Time is the most important ingredient in any financial freedom recipe. Consistency,
• 3:46
  Suze: month in and month out. If you really don't know
• 3:49
  Suze: what to do, I'll still stick by if you don't
• 3:52
  Suze: know what to do, just do a
• 3:54
  Suze: index ETF just that simple. Could you make more money
• 3:59
  Suze: if you did other things? Yes. But if you just
• 4:02
  Suze: want simplicity, you don't want to think about it, and
• 4:05
  Suze: you just want to do it, great. And you might
• 4:07
  Suze: want to listen to last Sunday's podcast, because I gave
• 4:12
  Suze: you some great ideas there.
• 4:14
  Suze: All right. All right, go on.
• 4:16
  KT: OK, this is from Sharon.
• 4:19
  KT: Sharon said hello there KT and Suze. See, Sharon, I
• 4:22
  KT: picked you because it's our Sunday summer schedule. KT, I hope...
• 4:26
  Suze: Wait. What did one have to do with the other?
• 4:29
  KT: Because she said, KT, I hope my question is relevant
• 4:33
  KT: enough for others for Suze to answer this. So there
• 4:37
  KT: you go. She's being very thoughtful.
• 4:40
  KT: Suze, based on my data shared here, I'm 68. In
• 4:44
  KT: your opinion, do I really need a revocable trust? And
• 4:49
  KT: then she said, I listened to you insisting that everyone
• 4:52
  KT: must have a revocable trust in case they become incapacitated.
• 4:58
  KT: I understand that concern. Since I don't own real estate,
• 5:02
  KT: I get the sense this may not be necessary for me.
• 5:07
  Suze: Wait, are you saying...
• 5:09
  KT: I'm not done.
• 5:09
  Suze: Wait, are, are you saying there, did I just hear
• 5:12
  Suze: that right, because she doesn't own real estate, she thinks
• 5:16
  Suze: she can never be incapacitated.
• 5:18
  KT: Well, she said she doesn't think this is necessary for
• 5:21
  KT: her to have...
• 5:21
  Suze: But right before that KT, she said, I say that
• 5:25
  Suze: everybody should have one just... incapacity, right?
• 5:28
  KT: But wait, listen to this. Here's her thought. My 36
• 5:32
  KT: year old daughter is my sole beneficiary on all financial
• 5:36
  KT: accounts and is a joint account holder on a couple
• 5:40
  KT: of savings accounts and my checking. She is a small
• 5:44
  KT: business owner and may need to borrow money for her
• 5:47
  KT: business in the future.
• 5:49
  KT: The last part concerns me.
• 5:52
  Suze: Why are you looking at me like that?
• 5:54
  KT: Well, because she thinks because she has a 36 year
• 5:57
  KT: old daughter who said, Don't worry, Mom, I'll take care
• 5:59
  KT: of you, that she doesn't need an incapacity clause in
• 6:05
  KT: a trust.
• 6:06
  Suze: What is this woman's name?
• 6:07
  KT: This is from Sharon.
• 6:09
  Suze: Sharon, please, please, please, and everybody else out there.
• 6:15
  Suze: Why do I keep telling you over and over and
• 6:20
  Suze: over again? Why did the very first book I ever write,
• 6:25
  Suze: You've Earned It, Don't Lose It, in 1995, why did
• 6:29
  Suze: I make it such a big chapter as to why
• 6:32
  Suze: you all need a living revocable trust.
• 6:37
  Suze: Why? Because over all these years I have seen firsthand
• 6:44
  Suze: what happens to people,
• 6:47
  Suze: when they don't have a trust, not just with probate fees, fine,
• 6:51
  Suze: you want your kids to pay probate or whoever, I
• 6:54
  Suze: don't personally care about that.
• 6:56
  Suze: I care about that you get sick, you become incapacitated,
• 7:01
  Suze: you think you have everything under control. You think that
• 7:05
  Suze: you've named your 36 year old daughter to take care
• 7:09
  Suze: of everything, and you think nothing can happen to her.
• 7:13
  Suze: You think that she doesn't need a living revocable trust
• 7:17
  Suze: with an incapacity clause in it, Mamma, in case she
• 7:21
  Suze: gets hit by a car. Now she's incapacitated and you
• 7:25
  Suze: need to take care of her, but you can't make
• 7:28
  Suze: any decisions with her because she doesn't have a durable
• 7:31
  Suze: power of attorney for healthcare, and she now is over
• 7:34
  Suze: 18 years of age, so you can't make decisions for her.
• 7:38
  Suze: So this isn't about age. This is about the reality
• 7:42
  Suze: of life, everybody, and what can go wrong. So all
• 7:47
  Suze: I'm asking you to do is prepare for the worst
• 7:51
  Suze: and hope for the best.
• 7:53
  Suze: A will does not help you in case of an incapacity.
• 7:58
  Suze: In many cases, a power of attorney for finances will
• 8:03
  Suze: not help you. Why? Because banks might not take them.
• 8:07
  Suze: We've talked about that. We talked about that on last
• 8:10
  Suze: Thursday's podcast. Things go wrong and when they go wrong,
• 8:15
  Suze: guess who you all come to? You come to me.
• 8:18
  Suze: So how do we solve that before it goes wrong?
• 8:22
  Suze: I tell you what you need. You might not want it,
• 8:25
  Suze: but every single one of you needs it, which is
• 8:29
  Suze: why the must-have documents, seriously, were created over 25 years ago,
• 8:36
  Suze: which is why they were made for you
• 8:39
  Suze: to be able to share them for free with your
• 8:41
  Suze: loved ones, which is why we allowed updates absolutely free
• 8:46
  Suze: for you in case there was an update. That's why
• 8:49
  Suze: we allowed you to make as many changes as you wanted,
• 8:53
  Suze: absolutely free. Why?
• 8:56
  Suze: Because I don't want you to see all your hard
• 8:59
  Suze: work to attain financial freedom to possibly go down the
• 9:04
  Suze: drain just because you haven't taken time to do what?
• 9:09
  Suze: create what we call the must-have documents again. You should
• 9:14
  Suze: check them out at musthavedocs.com.
• 9:19
  KT: Great. Yeah, I, I mean 36 year old daughter, right,
• 9:23
  KT: that's still very young,
• 9:26
  Suze: But you know what's interesting about that email, the very
• 9:29
  Suze: last line.
• 9:31
  Suze: She's going into business. She may need to borrow money.
• 9:35
  KT: Yes, and Mommy was worried about that... concerned
• 9:37
  Suze: Yeah, because KT, we've seen it all. Everybody, Mama here
• 9:42
  Suze: already has a gut feeling about it, so maybe the
• 9:45
  Suze: daughter isn't the right one to make as your successor beneficiary.
• 9:50
  Suze: Just saying, all right, KT, go on.
• 9:52
  KT: OK. This is from Sherry. She said, Hello, Suze. I
• 9:56
  KT: went to a luncheon targeting seniors.
• 9:59
  Suze: I hate those luncheons. You go for... oof I have them.
• 10:04
  KT: Stop, stop, stop. Let me tell you what this is about.
• 10:07
  KT: It is for MASA Emergency Shield plus membership to cover
• 10:13
  KT: medical transportation.
• 10:16
  KT: Suae, to get the special price, I had to buy
• 10:19
  KT: it that day. Have you heard of it? Is it legitimate?
• 10:23
  KT: Is MASA easy to work with? And then Sherry, who
• 10:27
  KT: was very smart, she said, I thought to myself, before
• 10:30
  KT: I buy, I have to ask Suze.
• 10:34
  KT: She said it's about $6,000 for a lifetime for her
• 10:39
  KT: and her husband.
• 10:40
  Suze: And did they say they had to buy it that day?
• 10:42
  KT: Yes.
• 10:43
  KT: I knew it.
• 10:43
  KT: At the lunch and before dessert, probably.
• 10:45
  Suze: You all listen to me and listen to me closely
• 10:49
  Suze: so that I don't get indigestion, just because you went
• 10:52
  Suze: to get a free meal to be sold something.
• 10:56
  Suze: There's no such thing as a free lunch, seriously, and
• 11:00
  Suze: when people have to entice you, and as seniors, I
• 11:04
  Suze: get it.
• 11:05
  Suze: 'Cause maybe you don't have the money to go out
• 11:07
  Suze: and buy yourself meals. Maybe you wanna be with other people,
• 11:12
  Suze: but when somebody is offering you a free meal, it
• 11:16
  Suze: is a chance to sell you a trust, to sell
• 11:20
  Suze: you investments, to sell you this MASA thing. So, let
• 11:25
  Suze: me just answer this for all of you. MASA is
• 11:28
  Suze: a real company.
• 11:30
  Suze: All right, it's just that simple, and it's an emergency
• 11:34
  Suze: shield plus plan that targets, seriously targets seniors at luncheons,
• 11:41
  Suze: and it is a red flag, and you do not
• 11:44
  Suze: need to buy it on the spot number one. The
• 11:48
  Suze: value of this product depends heavily, KT on your existing
• 11:53
  Suze: Medicare
• 11:54
  Suze: and supplemental coverage, your travel habits and your risk tolerance.
• 12:00
  Suze: So number one, legitimate company, but they have seriously mixed reviews.
• 12:06
  Suze: Now some people love them. If you go to Trustpilot,
• 12:10
  Suze: you'll see that many customers kind of praise them and
• 12:13
  Suze: things like that. However...
• 12:16
  Suze: It also has many cons against it. Some people report
• 12:22
  Suze: that they're pushy, they're pressured to sell, they didn't receive
• 12:26
  Suze: the contract details, and on and on and on. Now,
• 12:29
  Suze: what's important for all of you to understand is this
• 12:33
  Suze: the pricing that this person just named in the email
• 12:37
  Suze: that she sent KT is exactly the same pricing that's
• 12:41
  Suze: on the MASA website. There is no deal there.
• 12:45
  Suze: So, if you really want it, you can go and
• 12:48
  Suze: look at it, but chances are for like $6,400 or
• 12:53
  Suze: whatever it is, I just, I just, I don't know.
• 12:58
  Suze: I think twice, but here's the thing you really got
• 13:00
  Suze: to think about, you'd never buy anything on the spot,
• 13:03
  Suze: you research it, go and see what others are saying
• 13:07
  Suze: about it. Some people like it, and some people do not.
• 13:11
  Suze: And maybe you don't need it at all. All right, KT.
• 13:15
  KT: A lot of those seniors are pressured into being embarrassed
• 13:19
  KT: if they don't buy because they just got a free lunch,
• 13:22
  KT: and that's the sad thing. You should always say thank
• 13:25
  KT: you so much for my lunch. Let me think about it.
• 13:27
  KT: I'll get back to you.
• 13:29
  Suze: You know what I've always wanted us to do in
• 13:30
  Suze: Florida because they're rampant here in Florida.
• 13:33
  KT: We get these invites...
• 13:35
  Suze: All the time, and I'm like,
• 13:36
  KT: Once a week at least
• 13:36
  Suze: KT, let's go. Let's go get a free lunch and
• 13:39
  Suze: let's see what happens when the people giving it see
• 13:42
  Suze: Suze Orman and KT walk in and sit down.
• 13:45
  Suze: I've often wanted to do that. Should we do that?
• 13:48
  KT: No.
• 13:49
  Suze: Why not?
• 13:50
  KT: It's sad.
• 13:51
  Suze: I wanna do that.
• 13:52
  KT: It's sad for the, for the person standing behind the podium
• 13:57
  KT: trying to sell. And no, no, no, we're not. We're not...
• 14:00
  Suze: Wait, wait, wait, wait. You feel sorry for the person
• 14:03
  Suze: that's trying to sell people something that they probably don't need.
• 14:06
  Suze: If it's something legitimate, they should love that Suze Orman
• 14:10
  Suze: has walked in to say she'll verify what I'm saying
• 14:14
  Suze: is true.
• 14:15
  Suze: If all of a sudden they get embarrassed and they
• 14:17
  Suze: freaked out, that is a sign that everybody should get
• 14:20
  Suze: up and leave after dessert, including us. Next question, Miss. Travis.
• 14:25
  KT: This is from Marie. She said, Hi, Suze and KT.
• 14:29
  KT: I just met with my Fidelity representative.
• 14:33
  Suze: Of course. Oh, wait, wait, want me to tell you
• 14:35
  Suze: what the Fidelity rep wants to...
• 14:37
  KT: No, no, no.
• 14:39
  KT: He kept trying to get me to move my money
• 14:42
  KT: into fixed rate contract annuities telling me that they are
• 14:47
  KT: good annuities and that they are the same as CDs.
• 14:51
  KT: I went through your prior annuity podcast, and I'm still
• 14:55
  KT: not sure if this is a good idea.
• 14:57
  KT: The word annuities makes me nervous because there are so
• 15:02
  KT: many bad ones out there. Are these OK to invest in,
• 15:06
  KT: or is this a scam?
• 15:07
  Suze: Vote number one, it's not a scam. So Marie, just
• 15:11
  Suze: know that. But why did I know that that was
• 15:14
  Suze: gonna happen? It's because every email I'm not joshing right now, KT,
• 15:20
  Suze: that we get who meets with a Fidelity advisor all says:
• 15:26
  Suze: Annuity, annuity, annuity. I have not gotten one where the
• 15:31
  Suze: email says, oh, this index fund, do this, do that.
• 15:36
  Suze: Obviously the adviser on some level is being compensated for that.
• 15:42
  Suze: I don't think they're being compensated by the normal 5, 7, 8% commission,
• 15:46
  Suze: but there's something going on.
• 15:49
  Suze: And so if you meet with a Fidelity adviser and
• 15:52
  Suze: they suggest any type of annuity, can you just ask
• 15:56
  Suze: them how much do they pay you? Do you get
• 15:58
  Suze: more if you suggest an annuity to me versus an
• 16:02
  Suze: index fund? Can you just ask them that question? But
• 16:06
  Suze: what is not OK,
• 16:09
  Suze: is that an annuity is not like a certificate of
• 16:14
  Suze: deposit on any level. A certificate of deposit comes with
• 16:19
  Suze: a guarantee from the federal government, FDIC, if it's from
• 16:24
  Suze: a bank, up to 250,000. An annuity
• 16:28
  Suze: is a whole different guarantee, and it's subject to the
• 16:33
  Suze: claims paying ability of the issuing company, meaning that if
• 16:37
  Suze: the insurer gets in trouble, KT, your guarantee is only
• 16:41
  Suze: as good as their balance sheet.
• 16:43
  Suze: And it's with a state guarantee association offering some backdrop,
• 16:48
  Suze: but it's not FDIC level protection. So shame on that
• 16:52
  Suze: adviser for saying to this person that it was just
• 16:56
  Suze: like a certificate of deposit. That's number one. She didn't
• 17:01
  Suze: say how old she is, but with an annuity.
• 17:06
  Suze: If you take out your money before the age of
• 17:09
  Suze: 59 and a half, not only do you pay ordinary
• 17:14
  Suze: income tax on it, KT, but there's a 10% penalty
• 17:18
  Suze: as well. Now, most annuity companies do allow you to
• 17:24
  Suze: take out 10%
• 17:25
  Suze: a year without any of the 10% penalty, but you
• 17:30
  Suze: still will pay ordinary income tax on it. Also, there
• 17:34
  Suze: is a surrender charge with most of these annuities. Fidelity
• 17:40
  Suze: sells what's called multi-year guaranteed annuities, so it's for three years,
• 17:45
  Suze: and the interest rate is guaranteed for that 5 years that.
• 17:48
  Suze: But there's a surrender charge, and the surrender charge with
• 17:52
  Suze: the one that's three years.
• 17:54
  Suze: It is 7% a year for all three years. So
• 17:58
  Suze: if something happens and she needs to come out seriously,
• 18:02
  Suze: it's 7%.
• 18:04
  Suze: Now the 7% can never go into her original principal,
• 18:09
  Suze: but it can sure go into her interest that she's
• 18:12
  Suze: earned if it's a 5 year annuity, it goes 7-7-7-6-5.
• 18:19
  Suze: So for every one of those years,
• 18:22
  Suze: there is a surrender charge, so there are so many
• 18:27
  Suze: things that you need to think about. Obviously a certificate
• 18:31
  Suze: of deposit, when you get your interest, it's taxed yearly.
• 18:36
  Suze: With an annuity. You don't pay taxes on it until
• 18:40
  Suze: you withdraw it or you withdraw the interest. However, with
• 18:44
  Suze: all of that said,
• 18:46
  Suze: with certain annuities in certain situations when they are fixed
• 18:55
  Suze: and you know you're not going to need the money
• 18:58
  Suze: and you want your interest rate to compound and at
• 19:02
  Suze: the end of the three years or the 5 years
• 19:05
  Suze: you just want to draw it out little by little.
• 19:09
  Suze: OK, I don't necessarily have a problem with it, but
• 19:13
  Suze: there are many, many things that you need to really
• 19:17
  Suze: think about before you do this. Not so bad, Marie,
• 19:22
  Suze: but shame on the adviser for saying that they were
• 19:25
  Suze: just like a CD.
• 19:29
  Suze: Go on, KT.
• 19:30
  KT: Suze, our next question is from Justin...
• 19:33
  Suze: This is kind of like a mini Susie school.
• 19:35
  KT: Well, listen to Justin's first line. We're gonna have to...
• 19:38
  KT: maybe I'll send him a little something. He said, Hi,
• 19:41
  KT: Susze and KT.
• 19:43
  KT: I am one of the men smart enough to listen
• 19:46
  KT: and so enjoy starting my Sundays and Thursdays with you.
• 19:52
  KT: Uh oh, Justin, you only get us on Sunday this summer.
• 19:55
  Suze: Well, unless Robert wants to play best of on Thursday.
• 19:58
  Suze: Maybe he could always do that. All right, so that's
• 20:01
  Suze: an idea.
• 20:01
  KT: That's a good idea. I am working on my revocable trust,
• 20:05
  KT: and I have a question about our home. My wife
• 20:08
  KT: and I have about 10 years left on our mortgage.
• 20:11
  KT: Should we contact the mortgage company and get approval to
• 20:17
  KT: transfer the title of our home to the trust.
• 20:21
  KT: Or is it OK to utilize a transfer on death
• 20:25
  KT: deed which would transfer the title of the house upon
• 20:29
  KT: our deaths to the trust?
• 20:32
  Suze: I wouldn't do it that way, and the main reason
• 20:35
  Suze: is why.
• 20:38
  Suze: What for? First of all, you do not need approval
• 20:43
  Suze: to have your home transferred into the name of the
• 20:47
  Suze: trust as long as it's still your primary residency and
• 20:51
  Suze: you continue to occupy it and all of that, all right?
• 20:55
  Suze: You don't need to, you're actually protected by law.
• 21:00
  Suze: There is a law, an act, and I think it's
• 21:04
  Suze: called the G A R N Street Germaine Act. Did
• 21:09
  Suze: you know that?
• 21:11
  KT: No.
• 21:11
  Suze: Right, where it says, (Suze starts laughing)
• 21:22
  KT: Suze, it's like me asking you, do you know how
• 21:24
  KT: to make a zucchini wrap?
• 21:26
  Suze: I do now.
• 21:28
  Suze: Anyway, where a lender cannot enforce a due on sale
• 21:34
  Suze: clause when you transfer your primary residency into a revocable
• 21:38
  Suze: living trust again, as long as you remain a beneficiary
• 21:42
  Suze: of the trust and you continue to occupy the home
• 21:46
  Suze: as your primary residency now if it's a co-op,
• 21:51
  Suze: in New York, for instance, they may have a problem
• 21:54
  Suze: with it, so they may not let you do it.
• 21:56
  Suze: But the truth of the matter is you normally can
• 22:01
  Suze: do it, so you don't have to inform your lender
• 22:04
  Suze: that you are going to be doing that, in my opinion.
• 22:07
  Suze: All right, KT.
• 22:09
  KT: OK, that was a funny question.
• 22:12
  Suze: KT, What was the name of that act?
• 22:15
  KT: Um, shrimp. I...
• 22:18
  Suze: Come on, KT, I just said it two minutes ago.
• 22:22
  KT: It's Garn
• 22:24
  Suze: Garn, Garn, what gar garn, right? Saint...
• 22:29
  KT: It's Germaine.
• 22:31
  KT: Saint Germain. I know Saint Germain. I lived in Paris.
• 22:34
  Suze: Thats' why I am asking you...
• 22:35
  KT: Saint Germain, Saint Germain.
• 22:38
  Suze: Act now. You'll never forget it. And what's it good for?
• 22:42
  KT: I don't know, but
• 22:45
  Suze: You do. It protects people from having to pay off
• 22:50
  Suze: their mortgage when they put it in trust.
• 22:52
  Suze: Oh, there's my girl. OK, now we just have to
• 22:56
  Suze: figure something out like that with Roth. What would be
• 22:59
  Suze: very Parisian with a Roth?
• 23:01
  KT: Hmm.
• 23:05
  Suze: All right, never mind. Go on to the next question.
• 23:08
  KT: Here's my next question. This is from Tristan. He wrote, Hi,
• 23:12
  KT: Auntie Suze and Auntie KT. All right, Tristan, here we go.
• 23:18
  KT: Tristan over here, a millennial man smart enough to listen.
• 23:22
  KT: Hope you ladies are staying out of trouble so far
• 23:25
  KT: this summer. I think he knows us. Right now, my
• 23:29
  KT: entire social circle is wrapped up in FOMO over these
• 23:35
  KT: massive summer IPOs. Do you know what FOMO is, Suze?
• 23:40
  Suze: Are you kidding me.
• 23:41
  KT: Fear of missing out. As you know, SpaceX just made
• 23:46
  KT: its public debut, and all my friends...
• 23:49
  Suze: I have a question. Did you have to look up
• 23:51
  Suze: what FOMO meant?
• 23:52
  KT: Yes, because I didn't know what a FOMO was.
• 24:00
  KT: All right, let me keep going. It gets better. It
• 24:03
  KT: gets really better. Ready for this because I, I added something.
• 24:07
  KT: All my friends are bragging about the share allocations they
• 24:10
  KT: managed to get as real investors. That's from SpaceX. I
• 24:15
  KT: sat the SpaceX IPO out with OpenAI and Anthropic's IPO
• 24:21
  KT: on the horizon within a few weeks and a month apart.
• 24:24
  KT: Should I consider participating,
• 24:27
  KT: in the upcoming IPO share allocation even with the 15
• 24:32
  KT: to 30 day lockup period. The financials seem to be
• 24:36
  KT: in better shape than SpaceX. I try to practice discipline
• 24:41
  KT: as you always said in your podcast, but resisting the
• 24:45
  KT: FOMO is tough when these IPOs are the only thing
• 24:50
  KT: people talk about at your social functions and work right now.
• 24:54
  KT: I value your judgment more than the hype machine. Thank
• 24:58
  KT: you as always. And then Tristan also gave us a
• 25:02
  KT: bonus question. World Cup, Suze, who do you think's gonna win?
• 25:07
  Suze: It's not, who do I think is gonna win.
• 25:09
  KT: Who do you know is gonna win?
• 25:10
  Suze: It's not who I know is gonna.
• 25:11
  KT: Who do you want to win?
• 25:13
  Suze: USA baby. USA baby. What?
• 25:17
  Suze: Not me.
• 25:21
  Suze: What gotten into you?
• 25:21
  KT: I want Colombia.
• 25:23
  Suze: Oh, because of Colo.
• 25:25
  KT: Yes, I want Colombia. Don't tell anyone, but...
• 25:29
  Suze: You just told everybody,
• 25:30
  KT: ... if they don't get it, I want USA to win.
• 25:33
  KT: USA is doing a great job, but Colombia's in the,
• 25:38
  KT: in there.
• 25:39
  Suze: Right, so...
• 25:39
  KT: So, so wait, I, I also wanna tell Tristan what
• 25:42
  KT: you want to maybe do, Tristan, and discuss this with
• 25:46
  KT: your friends. Tell them you're part of a growing counter
• 25:49
  KT: concept called JOMO.
• 25:52
  KT: Do you know what Jomo is, Suze?
• 25:55
  KT: It's true. It's a, it's a, it's a real deal.
• 25:59
  Suze: You have just asked me a question that I don't
• 26:02
  Suze: have a clue what the answer is. Wait, what do
• 26:05
  Suze: you think about that?
• 26:06
  KT: I think that's great. Here, listen to what it is.
• 26:09
  Suze: Wait, aren't you impressed?
• 26:09
  KT: Tristan and Suze, you might wanna be part of the
• 26:14
  KT: growing counter concept called JOMO.
• 26:17
  Suze: What is that?
• 26:18
  KT: Joy of missing out.
• 26:20
  Suze: Is that true?
• 26:21
  KT: Yes, it is. It's real.
• 26:24
  KT: Because I didn't know what FOMO was, so I did
• 26:27
  KT: have to look it up, and they said you may
• 26:29
  KT: want to be part of the growing counter concept or
• 26:32
  KT: counterculture called JOMO, the joy of missing out.
• 26:38
  KT: There you go.
• 26:40
  Suze: Do you not want me to answer his question, or
• 26:42
  Suze: do you feel like that was it?
• 26:44
  KT: Oh, I forgot. Oh yeah, answer Tristan's question. He wants
• 26:49
  KT: to know if he should join the...
• 26:51
  Suze: Yeah, listen to me.
• 26:55
  Suze: You know, you have to really understand that an IPO
• 27:01
  Suze: is not like a celebration.
• 27:03
  Suze: It's like this exit strategy. It is the moment, now
• 27:07
  Suze: listen to me closely, when angel investors, venture capitalists, private equity, founders,
• 27:17
  Suze: and early employees finally get to turn paper wealth into
• 27:22
  Suze: real money.
• 27:25
  Suze: And that's what it is all about. They are selling,
• 27:29
  Suze: you are buying, you got that? And that alone should
• 27:34
  Suze: tell you everything. I can tell you, because a lot
• 27:38
  Suze: of our money is invested in private equity.
• 27:43
  Suze: And when you invest in private equity, you don't know
• 27:46
  Suze: if you're gonna get any money back, you don't know
• 27:49
  Suze: how long it's gonna be tied up for, and if
• 27:51
  Suze: it happens to IPO such as a SpaceX, then you
• 27:56
  Suze: are waiting for your lockup period to come up where
• 28:00
  Suze: you can sell in most cases, and make a lot
• 28:04
  Suze: of money.
• 28:05
  Suze: So, again, I want you to think about that. Now,
• 28:09
  Suze: why are IPOs high priced? Why do they price them
• 28:14
  Suze: so high? Think about this, Tristan.
• 28:17
  Suze: And it is because the sellers want the highest possible valuation,
• 28:23
  Suze: because the banks want the highest possible fees, because the
• 28:29
  Suze: media wants the highest possible excitement, so you are not
• 28:34
  Suze: invited to a party, my friend. You are being invited
• 28:38
  Suze: to provide liquidity. That's what you are doing.
• 28:42
  Suze: So why do retail investors get the worst terms? Because
• 28:47
  Suze: you are the least informed participant. You don't see... and
• 28:52
  Suze: all your friends, they have not seen the secondary market transactions,
• 28:56
  Suze: the private valuations, the liquidation preferences, the inside lockup schedules,
• 29:02
  Suze: the debt covenants, the dilution waterfalls. You see the marketing.
• 29:08
  Suze: So how do you resist the FOMO when everyone around
• 29:11
  Suze: you is bragging.
• 29:13
  Suze: You already know the answer. FOMO is not a financial strategy,
• 29:19
  Suze: and here's the mind shift that I want for you.
• 29:23
  Suze: Your friends are chasing excitement. You are building wealth. They
• 29:28
  Suze: are not the same sport, and the people who brag
• 29:31
  Suze: the loudest at parties are almost never the ones who
• 29:34
  Suze: retire early. Just saying.
• 29:38
  Suze: OK, I could have given a talk on stage with
• 29:41
  Suze: that one. Do you see how these are kind of
• 29:44
  Suze: like mini Suze Schools?
• 29:45
  KT: That was a good one. OK, next question says in
• 29:48
  KT: the subject retirement, baby.
• 29:52
  KT: Hi Suze and KT, my husband and I love your podcast.
• 29:56
  KT: We have learned so much over the years. Thank you.
• 29:59
  KT: We are retiring early in 2027. We plan to sell
• 30:04
  KT: our home in Pennsylvania and downsize in North Carolina. The
• 30:09
  KT: list price of $635,000 for our home, which we own
• 30:14
  KT: outright and have no debt, will be the basis for
• 30:18
  KT: the budget on the investment in our next home.
• 30:22
  KT: We are moving in with my father to conduct our
• 30:25
  KT: home search and anticipate being there two to six months.
• 30:30
  KT: What should we do with the money during this time?
• 30:33
  KT: We plan to pay cash for a home when we
• 30:36
  KT: figure out where we wish to settle.
• 30:39
  KT: I will also get paid out for any unused accrued
• 30:43
  KT: vacation and sick time when I retire. At this moment
• 30:47
  KT: I anticipate that to be about $9,000. Is this considered
• 30:53
  KT: earned income? I'd like to maximize my Roth contribution in
• 30:58
  KT: 2027 despite retiring.
• 31:01
  KT: So she has two questions. What does she do with
• 31:04
  KT: the money from the income of her home?
• 31:07
  Suze: Well, here's what concerns me. She says the money we
• 31:11
  Suze: make from the sale of our home will be our
• 31:14
  Suze: budget for our next home. Just take into consideration here
• 31:19
  Suze: that if you have a home that you put on
• 31:21
  Suze: the market for 635, chances are you're the one who's
• 31:26
  Suze: gonna have to pay the 6% commission or
• 31:29
  Suze: so, to sell the house, which will be about $38,100
• 31:35
  Suze: so you're only going to have $596,900 for a new home.
• 31:42
  Suze: Just make sure that you have everything correct to know
• 31:47
  Suze: what you can really afford. You're going to do this
• 31:50
  Suze: in two to six months or so.
• 31:53
  Suze: You need to keep that money safe and sound, so
• 31:56
  Suze: put it in the highest yielding money market account, insured account, treasuries, liquid,
• 32:03
  Suze: everything liquid, so that when you find something, you can
• 32:06
  Suze: get it right away. You are not to invest this
• 32:09
  Suze: money in the stock market or anything else. Do you
• 32:12
  Suze: hear me? As far as you getting paid for any
• 32:16
  Suze: unused accrued vacation and sick time when you retire, guess what?
• 32:22
  Suze: That will count as earned income and because you are
• 32:26
  Suze: retiring in '27 early, as long as you have earned
• 32:31
  Suze: income in '27, and that's when you take it, you'll
• 32:35
  Suze: be fine. It will be counted as earned income. Give
• 32:38
  Suze: me one more, KT.
• 32:40
  KT: OK, this is another mortgage question, a good one.
• 32:43
  KT: My question, this is from Elaine. She said, Suze, my
• 32:46
  KT: question is I am 70 years old and I have
• 32:48
  KT: a mortgage of $97,000. If I pay it off now,
• 32:54
  KT: it will be a payoff of $55,000. I may move,
• 32:58
  KT: but it is not necessary. My monthly mortgage payment is $634.
• 33:05
  KT: If I use cash, I reduce my interest by $1,330
• 33:11
  KT: a year.
• 33:13
  KT: I just need a thought on this.
• 33:16
  Suze: Well, let me give you my thought. I wish I
• 33:18
  Suze: knew for sure that the $634 of your mortgage payment
• 33:22
  Suze: is simply for a mortgage payment and not including your
• 33:27
  Suze: property taxes and insurance, but I'm just going to assume
• 33:31
  Suze: that it is. If it were me, think about this
• 33:35
  Suze: right now.
• 33:36
  Suze: Now you're talking about $50,000 that generates for you $11,330
• 33:43
  Suze: a year in interest while that $50,000 in the mortgage
• 33:50
  Suze: makes you pay $634 a month for 12 months, which
• 33:54
  Suze: is approximately $7,582.
• 33:59
  Suze: Even if you took that $7,582 that you wouldn't be
• 34:03
  Suze: spending a year, you took away the $1,330 of interest
• 34:08
  Suze: that you make on that money, you are still looking
• 34:11
  Suze: at $6,252 more in your pocket or an additional $523
• 34:19
  Suze: per month. So if it were me.
• 34:22
  Suze: That's what I would do. So how was that, your Sunday?
• 34:27
  KT: I liked it. It's nice.
• 34:29
  Suze: Did you like it or love it?
• 34:30
  KT: I loved it. I love being with you on Sunday.
• 34:35
  KT: I feel like it's almost like a we're playing. It's nice.
• 34:38
  Suze: And it feels different than Thursday?
• 34:40
  KT: Totally different.
• 34:42
  Suze: Oh, that's great.
• 34:44
  KT: Really nice. I'm much more relaxed. I feel like it's
• 34:47
  KT: the weekend. I'm much more relaxed. I get very nervous
• 34:51
  KT: that we make Thursday perfect.
• 34:54
  KT: But Sunday, Sunday...
• 34:56
  Suze: Sunday, you don't care what we do on Sunday.
• 34:58
  KT: We can have, we can tell jokes. We can have
• 35:00
  KT: a little more fun.
• 35:01
  Suze: All right, everybody, I hope you are excited as us
• 35:05
  Suze: for our news. And so until next Sunday, there's only
• 35:09
  Suze: one thing that we want you to remember, and what
• 35:11
  Suze: is that, Miss. Travis?
• 35:13
  KT: Happy July 4th.
• 35:15
  Suze: Oh Jesus. All right, everybody, people first, then money, then things.
• 35:20
  Suze: Now you stay safe.
• 35:22
  KT: Happy birthday, America.
• 35:24
  Suze: Oh, she's so sweet, isn't she?