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Classic Suze School: A Different Way To Think About Your Net Worth · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:07
  Robert: October 15th, 2026. Welcome to the Women and Money podcast
• 0:11
  Robert: as well as everyone smart enough to listen. Hi there, Robert,
• 0:14
  Robert: the producer here. Today's classic Suze School is from about
• 0:18
  Robert: three years ago, and I want you to keep that
• 0:21
  Robert: in mind when Suze refers to certain natural and other disasters.
• 0:25
  Robert: The main message on what you need to do to
• 0:28
  Robert: protect yourself financially is very relevant today and still very,
• 0:33
  Robert: very important.
• 0:34
  Robert: We'll have a brand new Ask KT and Suze Anything
• 0:36
  Robert: for you this coming Sunday, but for now, here's Suze.
• 0:44
  Suze: The topic of this Suze School is, How do you
• 0:50
  Suze: calculate your net worth.
• 0:53
  Suze: Because if you calculate it incorrectly, you could end up
• 0:59
  Suze: in a whole lot of trouble.
• 1:03
  Suze: So recently, I got an email from a couple who
• 1:07
  Suze: lived where? In Ohio.
• 1:12
  Suze: And they wrote me and they said the following, Suze,
• 1:18
  Suze: we have listened to you now ever since you went
• 1:21
  Suze: on the air. We've read every single book. We've done
• 1:24
  Suze: every single thing that you wanted us to do. We've
• 1:28
  Suze: followed you in every possible way.
• 1:32
  Suze: We have enough money saved for retirement. The person who
• 1:37
  Suze: wrote this and my spouse has just retired, and we
• 1:41
  Suze: were so excited because we were going to sell our house,
• 1:45
  Suze: we were going to move, and everything was fabulous.
• 1:50
  Suze: And then the train wreck happened. And now our home,
• 1:57
  Suze: that was totally paid off, Suze. We listened to you.
• 2:01
  Suze: We paid off the mortgage of our home, so we
• 2:04
  Suze: didn't even have a mortgage, and we were going to
• 2:07
  Suze: use the proceeds of the sale of that house because
• 2:10
  Suze: we knew we were going to get all of it.
• 2:13
  Suze: To buy another house outright and we were going to
• 2:18
  Suze: be great.
• 2:21
  Suze: And now we can't sell our house because our house
• 2:25
  Suze: isn't worth anything.
• 2:29
  Suze: We can't even get a loan because the banks here
• 2:34
  Suze: are not loaning.
• 2:36
  Suze: And when we talk about getting money back from the
• 2:41
  Suze: lawsuits and everything, the lawyers are telling us it's probably
• 2:45
  Suze: going to be 30 years.
• 2:49
  Suze: And this couple was absolutely devastated because they now did
• 2:56
  Suze: not know what to do, because they owned a home outright.
• 3:02
  Suze: That had a lot of value to it.
• 3:05
  Suze: And now it's absolutely worthless.
• 3:11
  Suze: And I started to think about that, about how we
• 3:17
  Suze: count on something.
• 3:19
  Suze: That maybe a natural disaster could really easily just take
• 3:26
  Suze: away from us.
• 3:28
  Suze: And when it's a major disaster, then sometimes the insurance
• 3:33
  Suze: companies will take a long time to settle if you're
• 3:37
  Suze: even covered. I decided to call this couple because they
• 3:42
  Suze: were so heartbroken.
• 3:45
  Suze: And I did give them many ideas of what they
• 3:48
  Suze: could do and how we could possibly make it better
• 3:51
  Suze: than it is, but I asked them the question, which was,
• 3:56
  Suze: does your insurance policy cover hazardous materials?
• 4:03
  Suze: And they said to me, we have no idea.
• 4:07
  Suze: So I then started to think about things and then
• 4:11
  Suze: a week later there was another train accident. This one, however,
• 4:16
  Suze: didn't have any chemicals aboard. And then recently there was
• 4:21
  Suze: another one.
• 4:23
  Suze: And there are all kinds of accidents happening everywhere.
• 4:29
  Suze: Then I started to get emails as well from people
• 4:32
  Suze: who live in the Bay Area in California who are
• 4:36
  Suze: writing me saying, Susie, my house that had all my
• 4:41
  Suze: net worth in it.
• 4:43
  Suze: Everything I had was in that house, Suze, just fell
• 4:48
  Suze: down a cliff because of the rain.
• 4:52
  Suze: The hill got too soggy and there went my house
• 4:56
  Suze: and the foundation. Then I get another email. Suze, we
• 5:00
  Suze: lived in a motor home that we owned outright.
• 5:05
  Suze: And that's where we were living, and even though we
• 5:09
  Suze: have other money in a 401k and everything, the reason
• 5:15
  Suze: we were able to retire is cause we thought our
• 5:19
  Suze: net worth was fine because we owned our motor home
• 5:23
  Suze: outright and everything like that, and now, Suze, guess what?
• 5:28
  Suze: That motor home got caught in a flash flood because
• 5:33
  Suze: of the rains in California and now it is gone.
• 5:38
  Suze: The bad news is we don't have a place to live.
• 5:43
  Suze: So it's going to cost us more money, and we
• 5:46
  Suze: don't even know if we're insured for this or not.
• 5:52
  Suze: Because you have to remember, everybody, insurance policies can be very,
• 5:57
  Suze: very tricky.
• 5:59
  Suze: It could be you're possibly insured for a hurricane.
• 6:05
  Suze: But all of a sudden what happens is that the
• 6:08
  Suze: hurricane breaches a dam, and now water comes rushing in,
• 6:13
  Suze: and now water floods you out.
• 6:17
  Suze: And now mold sets in. And maybe your insurance policy
• 6:23
  Suze: isn't going to cover that.
• 6:27
  Suze: So it's really, really important that number one, you know
• 6:31
  Suze: exactly what your insurance policy is going to cover.
• 6:36
  Suze: But given the fact that we are having more tornadoes
• 6:41
  Suze: in the Midwest, Mississippi for instance, than we know what
• 6:46
  Suze: to do with hurricanes that are absolutely, when they do come,
• 6:53
  Suze: number fives and tremendously damaging.
• 6:58
  Suze: And you have fires in California, now you have floods
• 7:02
  Suze: in California, now you have chemical disasters in Ohio, and
• 7:07
  Suze: so on and so forth.
• 7:10
  Suze: Are you really safe counting the equity that you have
• 7:16
  Suze: in your home as part of your net worth? Are you?
• 7:23
  Suze: And I can tell you by the number of emails
• 7:25
  Suze: that I've gotten, they thought they were, but it's not
• 7:30
  Suze: part of their net worth anymore.
• 7:35
  Suze: So, it is very dangerous when you think you have
• 7:40
  Suze: more money than what you actually have, cause when you
• 7:45
  Suze: feel like you have a whole lot of money, you
• 7:48
  Suze: then also feel that you can spend more then probably
• 7:52
  Suze: you should be.
• 7:54
  Suze: And that's exactly one of the things that was happening
• 7:57
  Suze: and is happening in the United States because the prices
• 8:01
  Suze: of real estate went up so much. A lot of
• 8:05
  Suze: you truthfully felt like, oh, we have all this equity
• 8:08
  Suze: in our house, so we could either take out a
• 8:11
  Suze: home equity line of credit and buy this or buy
• 8:15
  Suze: that or go on vacation or even use it to
• 8:17
  Suze: buy another home.
• 8:20
  Suze: And then all of a sudden we get in trouble
• 8:22
  Suze: when something happens.
• 8:25
  Suze: I'll never forget back to 2007 and 2008.
• 8:31
  Suze: And many of the people, cause I was still on
• 8:34
  Suze: the Oprah Winfrey Show all the time, many of the
• 8:37
  Suze: producers that worked for the Oprah Winfrey Show.
• 8:41
  Suze: They made a great salary. They were good with their money.
• 8:46
  Suze: But they had extra money, so a few of them
• 8:49
  Suze: bought homes in Tampa, Florida. And they bought homes for
• 8:55
  Suze: $700,000 approximately beautiful homes, and they could afford it.
• 9:03
  Suze: And they would put down $140,000 as a down payment.
• 9:09
  Suze: They put down 20%.
• 9:12
  Suze: And they could easily afford the mortgage. That wasn't a problem.
• 9:18
  Suze: But that's when the real estate market totally collapsed. And
• 9:24
  Suze: you had homes in Tampa that went from 700,000, 800,000, 900,000,
• 9:32
  Suze: down to $100,000.
• 9:38
  Suze: But yet my friends still owed on a mortgage of
• 9:43
  Suze: approximately 5 or 6 or $700,000 depending on their circumstance.
• 9:51
  Suze: And they had absolutely no equity in their homes whatsoever.
• 9:57
  Suze: So now their net worth went down considerably.
• 10:03
  Suze: But their debt went up.
• 10:07
  Suze: Also to astronomical levels because they had to pay not
• 10:12
  Suze: only on the mortgage but they had to pay association
• 10:16
  Suze: dues which were a whole lot of money wherever they
• 10:20
  Suze: had bought.
• 10:22
  Suze: And they couldn't sell the house, cause nobody wanted to
• 10:27
  Suze: buy the homes, and therefore what happened to all of them.
• 10:31
  Suze: They had to sell it in a short sale just
• 10:34
  Suze: in case for those of you who don't know what
• 10:36
  Suze: a short sale is. A short sale is where the
• 10:41
  Suze: mortgage lender allows you to sell the house for less
• 10:47
  Suze: than what you owe them on the mortgage, so you
• 10:51
  Suze: are essentially short of the money that you owe them
• 10:56
  Suze: when you sell it.
• 10:58
  Suze: And the rest is history because for some of those
• 11:02
  Suze: short sales they owed taxes on the difference between what
• 11:06
  Suze: they sold it for.
• 11:08
  Suze: And what they owed the bank.
• 11:13
  Suze: So, I have to say we really live in a
• 11:19
  Suze: time and a place. Where the unpredictable has now become
• 11:26
  Suze: the predictable.
• 11:29
  Suze: So I am asking all of you, if you are
• 11:33
  Suze: calculating your net worth.
• 11:36
  Suze: I ask you to look at what your net worth
• 11:39
  Suze: is without the equity in your home.
• 11:46
  Suze: And I'm asking you to do that so that you
• 11:50
  Suze: get a realistic view as to what you really could
• 11:56
  Suze: afford if all of a sudden your home went away,
• 12:01
  Suze: and I know you think it will never happen to you.
• 12:04
  Suze: I know you think that, but it absolutely can.
• 12:09
  Suze: And if you prepare for the worst but hope for
• 12:13
  Suze: the best, you will never get yourself into the financial
• 12:18
  Suze: predicaments that so many of you are in right now
• 12:24
  Suze: or were in back in 2007 and 2008 and 2009.
• 12:33
  Suze: The other reason that I don't want you to necessarily
• 12:37
  Suze: include the equity you have in your home as part
• 12:41
  Suze: of your net worth is because for many of you
• 12:46
  Suze: you aren't going to sell that house you are going
• 12:50
  Suze: to live in that house hopefully for the rest of
• 12:54
  Suze: your life. That's what many of you tell me.
• 12:58
  Suze: But yet, when you calculate your net worth, when I
• 13:02
  Suze: ask you questions, you always include 100% of the equity
• 13:08
  Suze: that is in your home.
• 13:12
  Suze: But it's in your home. So you really can't look
• 13:17
  Suze: at that and figure out, well, I have this equity,
• 13:22
  Suze: maybe one day I'll sell.
• 13:24
  Suze: Maybe one day I can take out a home equity
• 13:27
  Suze: line of credit. That's what that couple in Ohio thought.
• 13:32
  Suze: They really thought that everybody. And now they can't, right
• 13:37
  Suze: at the time that they were planning to do so.
• 13:42
  Suze: So, if you live in a home that you're not
• 13:46
  Suze: going to sell, to make a decision if you can
• 13:50
  Suze: afford to retire.
• 13:52
  Suze: You have to be able to look at everything you
• 13:56
  Suze: have and make sure that what you have is enough
• 14:00
  Suze: at a very conservative interest rate.
• 14:03
  Suze: To generate the income that you will need to be
• 14:07
  Suze: able to retire or for one of you to be
• 14:12
  Suze: able to stop working.
• 14:15
  Suze: The sad part about the situation in Ohio with this
• 14:20
  Suze: couple is that even though they didn't have a mortgage
• 14:25
  Suze: payment because they owned their house outright.
• 14:29
  Suze: Now they can't stay in their home, but where do
• 14:33
  Suze: they move? And now if they move, all of a
• 14:36
  Suze: sudden they have to start paying rent again. Or if
• 14:42
  Suze: they buy another place, where do they get the money
• 14:46
  Suze: to do so? Most of their money is locked up
• 14:51
  Suze: in a 401k, a pre-tax one, as well as an
• 14:56
  Suze: IRA rollover.
• 14:59
  Suze: So, they can't take out a lump sum of money
• 15:02
  Suze: from there, cause that will be totally taxable to them,
• 15:06
  Suze: which is another reason why if they had it in
• 15:10
  Suze: a Roth retirement account.
• 15:13
  Suze: They could have taken a nice sum of money out
• 15:16
  Suze: of there tax free to just do what buy a
• 15:20
  Suze: condo or something outright when the time came.
• 15:24
  Suze: So do you understand how all kinds of scenarios can happen?
• 15:31
  Suze: And that, while I know it feels good to own
• 15:34
  Suze: a home outright, and to know you have that equity,
• 15:37
  Suze: and to know if you need to, you could sell
• 15:39
  Suze: it and everything.
• 15:41
  Suze: But remember this couple never thought that this was going
• 15:46
  Suze: to happen to them.
• 15:49
  Suze: They always thought that they were going to be able
• 15:51
  Suze: to sell it, buy another one, if they wanted to,
• 15:53
  Suze: they could have taken out a home equity line of credit,
• 15:56
  Suze: and purchased even another rental property, or done whatever.
• 16:01
  Suze: Now, I'm sure that many of you have just listened
• 16:04
  Suze: to all this and you're going, but what can I do?
• 16:09
  Suze: How do I think about everything now, Suze? Can't this
• 16:12
  Suze: also happen to my stocks in my 401k or wherever
• 16:17
  Suze: you're invested? And I want you to listen to me
• 16:20
  Suze: closely now.
• 16:23
  Suze: Stocks are always liquid. It's not like an event happens,
• 16:29
  Suze: and all of a sudden the house is gone, so
• 16:31
  Suze: you can't sell it. You then have to go to
• 16:33
  Suze: the insurance policies and companies and things like that. Stocks
• 16:38
  Suze: are liquid.
• 16:40
  Suze: And most stocks and stock markets, if they're good quality
• 16:44
  Suze: stocks especially, come back after 3 to 5 years. So
• 16:49
  Suze: very seldom have I ever met anybody that had been
• 16:54
  Suze: invested wisely where it was a total loss and it
• 16:57
  Suze: was all gone.
• 16:59
  Suze: The other thing you have to remember is, you do
• 17:03
  Suze: not live in the stock market, but you live in
• 17:08
  Suze: your home, so you have to know certain things about
• 17:13
  Suze: your home.
• 17:15
  Suze: So get out your little Suze notebooks, and let's now
• 17:19
  Suze: start to talk about what I want every single one
• 17:23
  Suze: of you to do.
• 17:26
  Suze: Besides the fact that I do want you to think
• 17:29
  Suze: about the equity in your home differently, all right, I
• 17:33
  Suze: also want you to take steps to protect the equity
• 17:37
  Suze: that's in your home.
• 17:39
  Suze: And I just want to say this here very quickly.
• 17:42
  Suze: This podcast was not about stop paying down your mortgage
• 17:46
  Suze: or anything like that. It was about just look at
• 17:51
  Suze: things realistically as to what can happen. I still want
• 17:55
  Suze: you to make it your number one priority if you
• 17:59
  Suze: are going to live in your home for the rest
• 18:02
  Suze: of your life or you intend to, to pay down
• 18:05
  Suze: the mortgage by the time you retire.
• 18:08
  Suze: Just let's get that straight right here.
• 18:12
  Suze: The other thing now that I want you to do
• 18:15
  Suze: is I want you to call your insurance agent.
• 18:18
  Suze: And I want you to ask every and any question
• 18:24
  Suze: that you have, and the questions are obviously, what doesn't
• 18:31
  Suze: my insurance policy cover me for? 'Cause most insurance policies
• 18:36
  Suze: do not cover floods, or earthquakes, or volcanoes, or war
• 18:42
  Suze: or nuclear hazards, or hurricanes, things like that.
• 18:49
  Suze: Surprisingly, many of them do cover for tornadoes, and it's
• 18:55
  Suze: also something interesting for you to know that, as I
• 18:58
  Suze: said earlier, you have a hurricane, and you're damaged, but
• 19:02
  Suze: the real damage is from the water that comes in
• 19:05
  Suze: after the hurricane, and causes mold and everything, not covered.
• 19:10
  Suze: In a tornado, a tornado blows out a window and
• 19:14
  Suze: then water comes in or something.
• 19:17
  Suze: Usually they cover it, but you have to know.
• 19:22
  Suze: You also have to ask this very important question.
• 19:28
  Suze: And the question is this, you bought your house maybe
• 19:32
  Suze: 1 year, 2, 3, 5 years ago.
• 19:36
  Suze: And real estate prices have gone up dramatically since then.
• 19:41
  Suze: Do you have adequate insurance? Are you insured for what
• 19:46
  Suze: your property is currently worth?
• 19:50
  Suze: And will your insurance company replace it at what it
• 19:56
  Suze: costs to replace it today versus just what it's valued at?
• 20:01
  Suze: 'Cause remember, we have inflation, everybody.
• 20:06
  Suze: So wood today is far more expensive than when maybe
• 20:11
  Suze: you insured it 3 years ago for a specific amount
• 20:14
  Suze: of money. So it may cost a whole lot more
• 20:18
  Suze: to rebuild that house.
• 20:21
  Suze: Than what you thought it was going to, so does
• 20:25
  Suze: your insurance policy cover you for replacement value or only
• 20:31
  Suze: what it's insured for? You have to ask those questions also.
• 20:39
  Suze: You have to ask. All right, my entire neighborhood was destroyed.
• 20:45
  Suze: There is nothing here anymore, and I actually don't want
• 20:49
  Suze: to live here any more. Do you have to rebuild?
• 20:55
  Suze: In the exact place that you own that home, or
• 21:00
  Suze: will your insurance company allow you to use your insurance
• 21:05
  Suze: money to rebuild or buy somewhere else?
• 21:10
  Suze: You have to think like that, and you have to know.
• 21:15
  Suze: The other thing that I want you to do is
• 21:18
  Suze: I want you today.
• 21:20
  Suze: Not tomorrow, not the next day. I want you right now.
• 21:25
  Suze: If you can, of course, I want you to go
• 21:30
  Suze: through your home and write down and take pictures of
• 21:34
  Suze: absolutely every single thing that you have in that house.
• 21:40
  Suze: Open up boxes. Open up cupboards. Open up everything and
• 21:46
  Suze: take pictures of it and write down a value of
• 21:49
  Suze: what it is worth, 'cause I promise you.
• 21:53
  Suze: If a tornado comes through, and everything is gone.
• 21:59
  Suze: You will not remember. Remember, I lived in the Oakland
• 22:04
  Suze: Hills when that huge fire destroyed 3,000 homes and that
• 22:11
  Suze: fire stopped 1 mile from my house.
• 22:16
  Suze: And afterwards I drove through those hills. There was nothing
• 22:21
  Suze: but ash. There was nothing left, a chimney here and there,
• 22:29
  Suze: but no cars. Everything cause the fire was so hot
• 22:34
  Suze: it melted everything.
• 22:38
  Suze: So as I was going through those hills, I'll never
• 22:41
  Suze: forget this, I was stopping to help friends who were
• 22:45
  Suze: sifting through the ashes looking for anything they could find,
• 22:51
  Suze: and I remember saying that to them, Well, do you
• 22:53
  Suze: have a list of everything that was in this house?
• 22:57
  Suze: And every single one of them said to me, no.
• 23:02
  Suze: So, imagine right now that everything that's in your house
• 23:08
  Suze: has turned to ash. There's no remnants of anything but ash.
• 23:14
  Suze: Could you really remember everything that's in there? And the
• 23:19
  Suze: answer to that question is, you absolutely could not.
• 23:25
  Suze: So, it is your job today.
• 23:29
  Suze: Or whenever you can really to protect yourself and everything
• 23:35
  Suze: within your house because your insurance policy will most likely
• 23:39
  Suze: cover that.
• 23:42
  Suze: But only if you can tell them what was in there. Also,
• 23:46
  Suze: you have to ask the question.
• 23:49
  Suze: Will it cover the replacement value of what it will
• 23:53
  Suze: cost you to replace the TV today, or do they
• 23:56
  Suze: only give you the value depreciated of what your TV
• 24:01
  Suze: was that you bought 5 years ago?
• 24:04
  Suze: These are questions that are really important for you to
• 24:08
  Suze: not only ask but for you to absolutely have an
• 24:15
  Suze: answer to.
• 24:16
  Suze: So again, this is not about depressing you.
• 24:21
  Suze: This is about making you a financial warrior where you
• 24:26
  Suze: are prepared for anything and everything that could possibly happen,
• 24:31
  Suze: because when you are prepared, when you know the possibilities
• 24:37
  Suze: or maybe even in certain circumstances now the probabilities.
• 24:43
  Suze: Then you feel secure because you are prepared, and what
• 24:49
  Suze: is the goal, the true goal, not only of money,
• 24:53
  Suze: but of the Women and Money podcast? It's to make
• 24:58
  Suze: you feel secure.
• 25:01
  Suze: So, again, I didn't do this podcast to disrupt your security.
• 25:08
  Suze: I did this podcast to go from false security to
• 25:12
  Suze: true security, to actions that I want you to take today,
• 25:18
  Suze: and just a new mindset of how to think about
• 25:23
  Suze: the equity that you have in your home when it
• 25:26
  Suze: comes to calculating your net worth.
• 25:31
  Suze: There's only one thing that I want you to say
• 25:34
  Suze: every single day, so say it with me, everybody, today,
• 25:40
  Suze: wherever I go, I will create a more joyful, peaceful,
• 25:46
  Suze: and loving world and my own way. That's what I
• 25:51
  Suze: was trying to do today with all of you. And
• 25:55
  Suze: if you do that, then I promise you you will
• 25:59
  Suze: be unstoppable.