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How Can Non-Married Couples Build a Shared Financial Life? · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:07
  Suze: What's the date, KT?
• 0:08
  KT: Good morning, Suze. It's November 6th.
• 0:11
  Suze: Are you positive?
• 0:12
  KT: Yes.
• 0:12
  Suze: You know what that means, don't you?
• 0:14
  KT: Yes.
• 0:14
  Suze: What does it mean?
• 0:15
  KT: We're close to Thanksgiving.
• 0:19
  Suze: We're always close to, we're always close to a holiday.
• 0:22
  Suze: Why is that, KT?
• 0:23
  KT: I love, I love parties. I love to celebrate. I
• 0:27
  KT: love gatherings. Suze does not.
• 0:31
  Suze: That's the truth. That's the God honest truth.
• 0:33
  Suze: Does that surprise all of you?
• 0:35
  KT: Yes.
• 0:35
  Suze: Do you think it surprises them?
• 0:37
  KT: Yes, it does. You're such a social person. You're so happy.
• 0:41
  KT: You know, you're full of life, and yet you love
• 0:44
  KT: to be alone with me. That's it.
• 0:47
  Suze: That's it. For every birthday that I have, everybody, and then
• 0:49
  Suze: we'll start this podcast. KT says.
• 0:53
  Suze: What should we do? Like, for instance...
• 0:54
  KT: For milestones, we, we did, I did sneak in one
• 0:58
  KT: great party...
• 1:00
  Suze: When I was 60, but now in June, which is
• 1:03
  Suze: not that far away, I'm gonna be 75, and KT wants to...
• 1:08
  KT: I'm planning. I wanna make a big party, but no...
• 1:11
  Suze: What does Suze say?
• 1:13
  KT: She said, I just wanna be with you.
• 1:15
  KT: So now we're gonna have a big party, just the
• 1:17
  KT: two of us. I won't tell them what we're doing
• 1:20
  KT: because it's a surprise for you.
• 1:23
  Suze: It's for me that I asked her for anyway, that's
• 1:26
  Suze: besides the point.
• 1:27
  KT: All right, let's get on with this. Welcome to the
• 1:30
  KT: Women and Money podcast, and everyone smart enough to listen.
• 1:34
  Suze: KT, do you think we think we need to change
• 1:36
  Suze: the name.
• 1:37
  KT: To the women, to the pod to the money podcast.
• 1:40
  Suze: No, to the people's podcast, to the some podcast that
• 1:44
  Suze: isn't just exclusive.
• 1:45
  KT: The People's Money Podcast...
• 1:47
  Suze: The People's Money... that's boring.
• 1:48
  KT: The Money Podcast for People.
• 1:52
  Suze: That's very funny, KT. That's gonna be the Money Podcast
• 1:56
  Suze: for People. I kind of like that no matter who
• 1:59
  Suze: you are anyway, for right now, however, this is the
• 2:03
  Suze: Ask KT and Suze edition, anything. And if you have
• 2:07
  Suze: a question, all you have to do is write into
• 2:10
  Suze: ask Suze podcast at gmail.com.
• 2:14
  Suze: And if KT chooses it, oh, I'll, I'll, I'll maybe
• 2:19
  Suze: answer
• 2:19
  Suze: it as well.
• 2:19
  KT: No, this is my first question is great. Ready?
• 2:23
  KT: Hello, Suze.
• 2:24
  Suze: You just interrupted me.
• 2:25
  KT: I did because, because I, I wanna get on with it.
• 2:28
  KT: I've got, I wanna get on with it
• 2:30
  Suze: Why? Because you got things to do?
• 2:31
  KT: I do, Thanksgiving's coming up.
• 2:35
  KT: OK, hello, Suze and KT. This is from Denise. Everyone,
• 2:41
  KT: please remind me of the podcast that went over how
• 2:45
  KT: to split money for bills. My husband makes less money
• 2:49
  KT: than I do. We currently split it in half, but
• 2:52
  KT: it may not be fair. I heard a podcast that
• 2:56
  KT: gave a mathematical equation as to how to solve this.
• 3:01
  KT: Let's tell her to do it the way we do it.
• 3:04
  KT: Suze pays for everything.
• 3:08
  KT: That's not true.
• 3:10
  Suze: No, we split the money that comes in, and then
• 3:13
  Suze: it is true that I pay for 95% of
• 3:17
  Suze: everything,
• 3:18
  KT: yeah, but you didn't tell her how we split it.
• 3:22
  KT: It's not 50/50, baby.
• 3:24
  Suze: No, but 75/25 doesn't equate to me paying for 95
• 3:28
  Suze: to 99%. However, everybody, I love paying for everything. I
• 3:34
  Suze: don't mind...
• 3:35
  KT: If she doesn't like something. She's, KT, you're paying for that.
• 3:38
  KT: I say, OK.
• 3:40
  Suze: And then we do that. But seriously, you know, we
• 3:44
  Suze: have to figure out, obviously, this is just going to
• 3:46
  Suze: be a podcast of me and KT talking to each
• 3:49
  Suze: other and Robert.
• 3:51
  Suze: Which is Robert, we have to figure out a way
• 3:54
  Suze: that people can just go on, put in what they're
• 3:57
  Suze: looking for, and up comes the podcast they're looking for,
• 4:01
  Suze: because I don't know that which one that podcast is in.
• 4:05
  KT: So she's also given that advice a number of times,
• 4:09
  KT: and we're about to do it again right now.
• 4:10
  Suze: So here you go, Denise, just for you.
• 4:15
  Suze: Let's say you make $7,000 a month. Let's say your
• 4:20
  Suze: spouse makes $3,000 a month, you'd add those two totals together,
• 4:25
  Suze: that's $10,000 and you divide that into whatever your monthly
• 4:32
  Suze: expenses happen to be that you share. Let's just make
• 4:35
  Suze: this ridiculous and say it's $3,000 a month is what
• 4:40
  Suze: you share. Therefore, you divide $10,000 into $3,000 and that
• 4:46
  Suze: will be 30%. Therefore, you then at $7,000 pay 30%
• 4:53
  Suze: of that $7,000 which is $2,100 a month. Your husband, 30%
• 4:58
  Suze: of that $3,000 is $900 a month.
• 5:01
  Suze: And there is your $3,000. Equal percentages, not equal amounts
• 5:09
  Suze: of money. Next question KT.
• 5:10
  KT: OK, this is from Debbie. Good morning. I am 66
• 5:15
  KT: and retired.
• 5:17
  Suze: Good for you.
• 5:18
  KT: I've been using ML...
• 5:19
  Suze: ML is Merrill Lynch.
• 5:20
  KT: ...for my advisor for over 25 years.
• 5:23
  KT: Now that I'm retired and have been really trying to
• 5:26
  KT: get on my game, I realized how much those fees
• 5:30
  KT: are costing me. I pay 1.23%, ready, everyone, which is
• 5:36
  KT: about $15,000 a year. She has a lot of money
• 5:41
  KT: they're looking after.
• 5:42
  KT: There are perks because they are linked to Bank of America.
• 5:46
  Suze: That's not a perk.
• 5:47
  KT: Well, hold on, hold on, hold on. I really can't
• 5:50
  KT: see the value anymore. Previously...
• 5:53
  Suze: Good for you, Debbie.
• 5:54
  KT: Previously I worked a lot. I didn't have time to
• 5:57
  KT: manage my own money. Vanguard's fees are about a third of
• 6:01
  KT: that and nothing if I self-direct. Should I take the leap?
• 6:06
  KT: Please advise.
• 6:07
  KT: Not only should you take the leap, you don't need
• 6:10
  KT: Vanguard either.
• 6:12
  Suze: You know, Debbie, obviously I think you should manage the
• 6:16
  Suze: money yourself, but it's not my money, it is your money,
• 6:21
  Suze: and it's going to manage 1.2 million because if you're
• 6:25
  Suze: paying 15,000 a year at 1.25%, that means you have
• 6:29
  Suze: approximately 1.2 million at Merrill Lynch.
• 6:33
  Suze: Is that gonna make you nervous? Do you know what
• 6:36
  Suze: you would invest in? Can you just simply take everything
• 6:40
  Suze: that it's already invested in, if you like what it's
• 6:43
  Suze: invested in, and transfer that to like Schwab or Fidelity
• 6:47
  Suze: or even Vanguard, and then just manage it from there?
• 6:50
  Suze: How much did you have to do with that? Could
• 6:54
  Suze: you use that extra $15,000 a year? Could you? You
• 6:59
  Suze: probably could. Is this outside of a retirement account, inside
• 7:03
  Suze: a retirement account? What do you have going on there?
• 7:07
  Suze: Do they help you with tax planning and how much
• 7:09
  Suze: you should convert? And I can go on and on
• 7:11
  Suze: and on. So, the other thing is this: maybe you
• 7:16
  Suze: don't do it all at once.
• 7:18
  Suze: Maybe you take a third of it and you transfer
• 7:22
  Suze: it and you see how that feels or then maybe
• 7:25
  Suze: some more, whatever it may be, or you talk to
• 7:28
  Suze: this person if this person has been doing really, really
• 7:32
  Suze: well for you and you feel secure with this person
• 7:35
  Suze: or whatever it may be, maybe you talk to them
• 7:38
  Suze: and you say, you know what...
• 7:40
  Suze: I'm going to leave you unless you only charge me 0.5%
• 7:43
  Suze: to manage this money because the truth is we don't
• 7:46
  Suze: change it much. Do you have bonds? You shouldn't be
• 7:49
  Suze: paying any percentage if you're investing in bonds. You're going
• 7:52
  Suze: to have to make this decision. You might want to
• 7:55
  Suze: take 300,000 and see what you do with that 300,000
• 7:59
  Suze: or take it in kind so you don't have a
• 8:02
  Suze: taxable event, again unless this is a retirement account. So
• 8:06
  Suze: you're going to have to make this decision yourself. But again,
• 8:11
  Suze: you're never powerful in life until you're powerful over your
• 8:14
  Suze: own money, how you think about it, how you feel
• 8:17
  Suze: about it, and how you invest it. Just that simple.
• 8:22
  KT: Suze,
• 8:23
  KT: next question is from Scott. Scott, I want to go
• 8:27
  KT: to Scotland.
• 8:28
  Suze: Why?
• 8:29
  KT: I want to go fishing in Scotland and golfing.
• 8:33
  Suze: Oh, we're gonna go golfing. Does that mean we have
• 8:35
  Suze: to take our golf clubs
• 8:36
  Suze: all the way?
• 8:36
  KT: No, no, no, you can just rent them. We're not
• 8:38
  KT: that good.
• 8:41
  KT: Hi Suze.
• 8:42
  Suze: Although tell everybody
• 8:43
  Suze: how good I am.
• 8:43
  KT: Suze's really a great golfer. Colo and I can't believe
• 8:48
  KT: how she can drive that ball straight down the fairway,
• 8:51
  KT: and he and I end up in the lake. We,
• 8:54
  KT: we end up in the trees. We have to search
• 8:56
  KT: in the woods, but Suze, bam, and she doesn't even
• 8:59
  KT: do a practice swing. That's, that's the, that's the part
• 9:03
  KT: that we don't get. We, we practice like 10 swings.
• 9:07
  KT: And wiggle. We do everything that the pros do, but
• 9:10
  KT: Suze just gets up there with a pair of flip
• 9:12
  KT: flops on and bam, hits that ball. All right, ready? Hi, Suze,
• 9:17
  KT: I'm retiring in about a year and thanks to you,
• 9:20
  KT: I've done very well with my retirement savings.
• 9:24
  KT: I'm about to rebalance my retirement account and I'm wondering
• 9:28
  KT: if I really need to do a 60/40 balance or
• 9:32
  KT: if I could do something more like 80/20. If 20%
• 9:37
  KT: of my retirement savings were in cash and bonds,
• 9:40
  KT: I could live on that amount of money very comfortably
• 9:43
  KT: for five years, six if I'm careful. Which is making
• 9:47
  KT: me wonder why I would have 40% of my account
• 9:52
  KT: in slow growth investments.
• 9:55
  Suze: Scott boy,
• 9:57
  KT: Scotty, Scotty,
• 9:58
  Suze: Scotty, do you want to go to Scotland with us?
• 10:00
  Suze: You can do anything you want. There are no formulas
• 10:03
  Suze: that I want you to really follow.
• 10:06
  Suze: You know, maybe I give generic advice and things when
• 10:09
  Suze: a lot of people are listening or reading, but truthfully,
• 10:14
  Suze: I want you all to invest what you feel you
• 10:18
  Suze: should do according to you, period. If you wanted 100%
• 10:23
  Suze: of your money in the market, honest to God.
• 10:26
  Suze: And you knew that you had enough in cash to
• 10:30
  Suze: carry you for three to five years of expenses above
• 10:34
  Suze: your income, Social Security, all of those things. I don't
• 10:38
  Suze: care if you do that.
• 10:39
  Suze: But you have to know that you're willing to risk,
• 10:43
  Suze: what you're not willing to risk, what you want to
• 10:45
  Suze: keep safe, and what you don't want to keep safe. So,
• 10:49
  Suze: it's really totally up to you. You can do anything
• 10:54
  Suze: you want, cause it's
• 10:55
  Suze: your money. And I know conventional wisdom would say, no, no,
• 10:59
  Suze: you have to be conservative, you have to be Scotty
• 11:02
  Suze: and do what makes sense for you in your particular situation. All right.
• 11:07
  KT: OK, my next question is from Jill and Jill said,
• 11:12
  KT: hi Suze and KT. Ready? I love the opening. My
• 11:16
  KT: sweetheart and I.
• 11:18
  KT: Both 53 and together for five years.
• 11:21
  Suze: What did you like about that opening?
• 11:24
  KT: My sweetheart and I.
• 11:25
  Suze: I never call you sweetheart.
• 11:26
  KT: No, but Jill is calling her, her...
• 11:29
  Suze: Does that mean you want me to call you sweetheart?
• 11:32
  KT: You call me sweetheart sometimes, but not
• 11:34
  KT: really.
• 11:36
  KT: All right,
• 11:36
  KT: so.
• 11:37
  KT: My sweetheart and I, both 53 and together for five years,
• 11:41
  KT: have been devoted listeners for two years now. Your podcast
• 11:45
  KT: has sparked honest financial conversations between us and continues to
• 11:51
  KT: help us prepare for retirement. Thank you.
• 11:55
  KT: Now, here's our dilemma.
• 11:59
  KT: We live and earn modestly with similar incomes and comparable
• 12:04
  KT: retirement savings. I own a $333,000 home outright. He owns
• 12:11
  KT: a slightly less valued one with a $110,000 mortgage. We
• 12:16
  KT: eventually want to share a home and grow old together,
• 12:20
  KT: but neither of us want to marry again. Probably smart.
• 12:24
  Suze: That isn't smart. Why don't they want to marry again?
• 12:27
  KT: I don't know if we both ready,
• 12:29
  Suze: So many advantages. All right, go on.
• 12:31
  KT: OK, if we both sell and buy a home together
• 12:34
  KT: as tenants in common, the surviving partner could end up
• 12:38
  KT: owning a house with the other's adult children, a potentially
• 12:43
  KT: awkward and complicated setup. If he sells his home, moves
• 12:47
  KT: in with me, and splits expenses, he'd be contributing to
• 12:51
  KT: a house he doesn't own.
• 12:53
  KT: On the other hand, he gets to invest the proceeds
• 12:56
  KT: from selling his home, while mine would remain tied up
• 13:00
  KT: in equity, and that feels unbalanced too.
• 13:04
  KT: Suze, how can an unmarried couple build a shared life
• 13:08
  KT: financially and emotionally without risking fairness, equity, or future security?
• 13:16
  Suze: How long have they been together?
• 13:17
  KT: Five years now. Wait, just five, and they're both 53.
• 13:21
  KT: So I'm gonna make an assumption that they both had
• 13:25
  KT: possibly miserable divorces or separations or whatever, and now...
• 13:31
  KT: They just want to be free together and happy, but fair.
• 13:36
  Suze: Jill, this is a little bit of a hard one
• 13:39
  Suze: because really it all boils down to trust. And even
• 13:43
  Suze: though he's your sweetheart, the truth of the matter is
• 13:48
  Suze: you've only been together five years, and I'm so sorry
• 13:51
  Suze: to say in my book, five years is such a
• 13:56
  Suze: short period of time.
• 13:59
  Suze: If you told me that you had been together 25 years,
• 14:02
  Suze: I would have said something different, but I think the
• 14:05
  Suze: best thing to do in this situation is let him
• 14:10
  Suze: sell his house. Let him invest all of that money.
• 14:15
  Suze: He moves into your home and he splits whatever expenses
• 14:20
  Suze: you want to be split with him, and that's how
• 14:23
  Suze: you do it, and the house remains in your name,
• 14:26
  Suze: hopefully in trust.
• 14:28
  Suze: And the thing is, is that if it's just in
• 14:31
  Suze: your name, you could give him a life estate in
• 14:36
  Suze: your trust that says if you were to die he
• 14:40
  Suze: is allowed to live there for as long as he
• 14:43
  Suze: wants to live there.
• 14:46
  Suze: Obviously he would have to pay expenses and pay to
• 14:49
  Suze: live there if he wanted to.
• 14:51
  Suze: And upon his death or when he moves out.
• 14:56
  Suze: Again, it all goes to your kids. That's probably how
• 15:00
  Suze: I would do it if I were you.
• 15:02
  Suze: But I think your concerns are valid, and I think
• 15:05
  Suze: they're really, really intelligent. So therefore let him sell his house.
• 15:12
  Suze: You keep yours, put it in trust. Give him a
• 15:15
  Suze: life estate or a life estate for x amount of years.
• 15:18
  Suze: Make sure you state that in your trust, and then
• 15:21
  Suze: everything upon the time of him moving out or he
• 15:24
  Suze: dies goes to your children. Just that easy.
• 15:29
  Suze: All right, KT, next question.
• 15:32
  KT: Ok, next question is from Laura. Susie, I'm hoping you
• 15:36
  KT: can help me. My father has left in his will
• 15:40
  KT: that I am to inherit his home and everything not mentioned. Hmm. Ok...
• 15:48
  Suze: Everything that he didn't designate in
• 15:50
  Suze: his will, KT.
• 15:50
  KT: And his four stepdaughters. Whoa, this sounds like a Cinderella question.
• 15:56
  KT: His four stepdaughters are to inherit $25,000 each. I want
• 16:02
  KT: to honor his wishes. His wife passed six years ago,
• 16:07
  KT: and he never removed her name from the deed. Hmm.
• 16:12
  KT: I encouraged him to set up a trust six weeks
• 16:15
  KT: ago when I learned about trust from your podcast. Thank you.
• 16:20
  KT: The sad thing is that he's now on hospice and
• 16:23
  KT: unable to sign documents and isn't coherent 20% of the time.
• 16:29
  KT: OK, but here is the good news. I am his
• 16:34
  KT: financial power of attorney. Can I set up the trust
• 16:38
  KT: on his behalf? He had an appointment with his lawyer
• 16:41
  KT: to do so, but went into the hospital and was unable.
• 16:46
  KT: Then unexpectedly went on hospice.
• 16:50
  KT: Oh boy, he thinks one particular stepdaughter will be giving
• 16:54
  KT: me great issue, and I believe he is right. How
• 16:58
  KT: can I protect the wishes in his will?
• 17:01
  KT: Laura sounds like she's very reasonable, Suze, and, and she
• 17:05
  KT: wants to do the right thing and honor her dad's wishes.
• 17:09
  Suze: So, first, let me just say this, Laura, is that no,
• 17:11
  Suze: you cannot do it. You cannot set up a trust
• 17:15
  Suze: on his behalf just because you're the financial power of attorney.
• 17:19
  Suze: That isn't granted in that type of a document, number one.
• 17:24
  Suze: Number two, the only downside of all this is if
• 17:28
  Suze: he has done a will, you are the executor of
• 17:32
  Suze: his will, it's just going to have to go through probate.
• 17:36
  Suze: That isn't that big of a deal in terms of
• 17:40
  Suze: where everything goes and one of the stepdaughters contesting.
• 17:45
  Suze: Because I doubt that they will because it's his will
• 17:47
  Suze: and his will is valid.
• 17:51
  Suze: It's going to cost you money that it wouldn't have
• 17:53
  Suze: cost you if you had done a trust. It might
• 17:55
  Suze: take six months to one year or two years, depending
• 17:57
  Suze: on the state you're doing it, because it's not in
• 17:59
  Suze: a trust, but you can do it that way. My
• 18:04
  Suze: real question for you is, you say that he's only
• 18:08
  Suze: unable to sign things like 20% of the time.
• 18:12
  Suze: What about the 80% of the time? Is he coherent?
• 18:18
  Suze: Could the lawyer go to the hospital and have him
• 18:23
  Suze: do the trust there during his coherent times? Is that possible?
• 18:30
  Suze: Because it's not like his stepdaughters know that he's always incapacitated,
• 18:35
  Suze: 'cause he's not. He's only incoherent 20% of the time.
• 18:41
  Suze: So if I were you, I would call the lawyer
• 18:45
  Suze: and say, can you go visit him and see what
• 18:49
  Suze: you think? Is he coherent? Does it make sense? You
• 18:54
  Suze: can videotape him, by the way, doing it as well
• 18:58
  Suze: so that everybody can see that he was coherent when
• 19:01
  Suze: he was doing it.
• 19:03
  Suze: And just because he's on hospice doesn't mean that he's
• 19:08
  Suze: going to die in two weeks, gonna die in three weeks.
• 19:11
  Suze: They're administering morphine. Hospice is a lot different than what
• 19:15
  Suze: people think. So, it's just something for you to consider.
• 19:20
  Suze: Worst case scenario, just follow his will.
• 19:24
  Suze: Be strong about it and just love him up during
• 19:27
  Suze: the day, during the night, every second you spend with him,
• 19:32
  Suze: because these really are the most precious moments of both
• 19:36
  Suze: of your lives, whether you know it or not. All right.
• 19:39
  KT: All right. Next question is from Jenna. Jenna said thank
• 19:44
  KT: you for your continued wisdom and passion for helping women
• 19:49
  KT: and all of those smart enough to listen.
• 19:52
  KT: I just love listening to you and KT on my
• 19:55
  KT: commute to work. I enjoy when people share that with
• 19:59
  KT: us because some people listen to us when they walk
• 20:02
  KT: their dog in the morning, when they exercise, when they meditate.
• 20:07
  KT: I don't know if you can meditate and listen to us,
• 20:10
  KT: but she said, here are the details before I ask
• 20:13
  KT: my question.
• 20:15
  KT: I put the mandatory 3% to my retirement. My employer
• 20:19
  KT: puts in 4%. I then put in a voluntary 2%,
• 20:24
  KT: and my employer puts in another 4%.
• 20:28
  KT: I owe $40,000 in credit card debt, all currently at
• 20:33
  KT: zero interest rate. My car is paid off. I owe
• 20:37
  KT: $360,000 on my mortgage. I make $155,000 a year, and
• 20:44
  KT: my FICO score is 746. I'm a single mama.
• 20:50
  KT: She said, Suze, you said don't think about saving for
• 20:52
  KT: your future till you have taken care of your mistakes
• 20:55
  KT: of the past. Hm, that's a good one. This makes
• 20:59
  KT: me think I should not add the voluntary contribution and
• 21:03
  KT: take the money to pay off the debt faster. Please advise.
• 21:09
  Suze: Here's the thing, girlfriend. You've also heard me say the
• 21:13
  Suze: biggest mistake you can make is passing up free money.
• 21:19
  Suze: Haven't you heard me say that? I don't care how
• 21:20
  Suze: much debt you have. I don't care whatever. You have
• 21:23
  Suze: to contribute up to the point of the match because
• 21:26
  Suze: it is free money. So it's not a mistake. Obviously
• 21:31
  Suze: your debt that you created for yourself, the $40,000.
• 21:36
  Suze: I'm not so upset about that because you said one
• 21:39
  Suze: thing here, you said you're a single mamma. So I
• 21:43
  Suze: don't know what you had to do,
• 21:46
  Suze: to get by as a single mama. So I'm not
• 21:49
  Suze: going to yell at you or even feel bad about
• 21:51
  Suze: the fact that you have $40,000 of debt. You have
• 21:54
  Suze: a great FICO score, you're making a great living. You're
• 21:58
  Suze: now on the right path.
• 22:01
  Suze: And especially at times like this where the markets are
• 22:04
  Suze: going up, it's still a great time to invest. I
• 22:07
  Suze: don't want that money out of your retirement account. Now, hopefully,
• 22:12
  Suze: regardless of your income that you're making, you are in
• 22:15
  Suze: a Roth retirement account at work, all right? Just tell
• 22:20
  Suze: me that you're doing that, cause otherwise, that would be
• 22:23
  Suze: a mistake. All right, now, listen.
• 22:26
  Suze: Just keep doing what you're doing. Keep paying it off
• 22:30
  Suze: as you can, and sooner than later you will be
• 22:33
  Suze: out of debt. Just that simple. All right, go on, KT.
• 22:37
  KT: OK, this is my last question, from Matthew. He said, Hi,
• 22:41
  KT: Suze and KT. Thanks for the many great episodes on
• 22:46
  KT: Roth accounts. I know KT will empathize with my struggle
• 22:51
  KT: to grasp the finer points of Roth funds.
• 22:54
  Suze: Wait, before you go on, KT.
• 22:56
  Suze: How do you feel about it that everybody in the
• 22:58
  Suze: world writes in and they identify with your lack of
• 23:04
  Suze: ability to understand Roths?
• 23:06
  KT: Because it's complicated and I'm a very smart girl.
• 23:09
  Suze: Now let me correct something here, right? You keep saying
• 23:13
  Suze: it's complicated.
• 23:14
  KT: It is.
• 23:15
  Suze: Listen to me. Everybody thinks it's complicated.
• 23:19
  Suze: And because you're all thinking it's complicated, you're all making
• 23:23
  Suze: it more complicated than it really is. So KT, I
• 23:28
  Suze: need you to stop thinking that it's complicated. I need
• 23:31
  Suze: you to start thinking along with Matthew and everybody else
• 23:35
  Suze: that it's actually easy and you can do it.
• 23:38
  KT: OK. Good Luck.
• 23:41
  KT: That's all, that's all I have to say, everyone. Good luck.
• 23:44
  KT: I'll give it a shot, Suze, but good luck.
• 23:47
  Suze: Why can't you do that for me, sweetheart?
• 23:50
  KT: I'll give it a shot. So I have a few...
• 23:52
  Suze: Could you imagine if I called you sweetheart all the time?
• 23:54
  KT: You know who calls sweetheart? Don calls our sister Barbara sweetheart.
• 24:00
  KT: She calls him sweetheart.
• 24:02
  KT: And Tom calls Lynn honey honey.
• 24:06
  Suze: And what does your brother call Lisa?
• 24:09
  KT: Uh Poopsy. Poopsy. Oh my God.
• 24:12
  Suze: I call my KT, KT.
• 24:16
  KT: And Colo calls me KT. He every morning. Hi KT.
• 24:19
  KT: Hi Suze. All right, so Matthew, we're gonna give this
• 24:23
  KT: a shot. So Matthew said, I have a few questions
• 24:28
  KT: in my road to understanding. OK. First, withdrawals. I'm only
• 24:33
  KT: gonna ask one question, Matthew, just so you know, we're
• 24:36
  KT: gonna take this step by step. There's like two pages
• 24:40
  KT: here of questions about the Roth, so I'm gonna do one.
• 24:43
  KT: That's it. That's all you get.
• 24:45
  KT: I understand there are no penalties on withdrawing contributions, but
• 24:49
  KT: I cannot touch the earnings. My question is on operationalizing this.
• 24:57
  KT: When I go into my brokerage account and see the
• 25:01
  KT: cost basis.
• 25:02
  KT: I know I can withdraw that amount, but when I
• 25:05
  KT: sell any particular stock, I sell earnings too. How do
• 25:10
  KT: I report on taxes without having to pay penalties and taxes?
• 25:16
  KT: Do not make this a quizzy, Suze.
• 25:19
  Suze: Oh, trust me, I won't because it's so easy. This
• 25:21
  Suze: is too easy for you to have this as a quizzy.
• 25:24
  Suze: Don't you agree?
• 25:25
  KT: Yeah.
• 25:26
  Suze: This is way too easy. You understand this one, right?
• 25:29
  KT: No.
• 25:29
  Suze: Matthew...
• 25:31
  Suze: Listen to me. Your cost basis doesn't determine anything. It
• 25:37
  Suze: doesn't matter when it's in a Roth IRA. Why? Because
• 25:43
  Suze: there are no taxes in a Roth when you buy
• 25:46
  Suze: or sell something. It's all tax-free. All that matters in
• 25:51
  Suze: a Roth is the amount that you originally contributed.
• 25:56
  Suze: So, if you originally contributed, let's just say $7,000 all right,
• 26:01
  Suze: let's just say that's true, and you bought something, you
• 26:05
  Suze: sold something, and you doubled your money.
• 26:09
  Suze: As long as you don't withdraw more than $7,000 there's
• 26:14
  Suze: no taxable event. It's not like they divide it from
• 26:17
  Suze: earnings to whatever. It's when you actually withdraw everything above
• 26:24
  Suze: the amount that you originally contributed,
• 26:27
  Suze: that will be considered earnings. But you're not going to
• 26:31
  Suze: take out more than you originally contributed before five years
• 26:35
  Suze: and when you're 59 and a half, so you're overthinking this, boyfriend.
• 26:38
  Suze: It's just that simple now, KT, did that make sense
• 26:41
  Suze: to you?
• 26:42
  KT: Yeah, that was easy.
• 26:44
  KT: That was easy.
• 26:46
  Suze: Come on.
• 26:47
  KT: No, that was easy. That made a lot of sense
• 26:49
  KT: to me. What you just said
• 26:50
  KT: was easy.
• 26:51
  Suze: Now, is it possible, everybody, here's the million dollar question.
• 26:56
  Suze: Is it possible KT thought that was easy because we
• 27:01
  Suze: shifted her mindset from thinking something was complicated to thinking
• 27:05
  Suze: it was easy? Is that possible?
• 27:07
  KT: Yeah, it is possible.
• 27:11
  KT: That was easy to understand.
• 27:13
  Suze: So you agree with me that maybe Roth's can be easy?
• 27:17
  KT: Yes.
• 27:18
  Suze: Easy, right?
• 27:19
  KT: Yes, yes, yes, yes, yes, yes.
• 27:22
  Suze: So you know what else is easy?
• 27:24
  Suze: The fact that that ends this Ask KT and Suze
• 27:28
  Suze: Anything podcast, one thing we want all of you to do,
• 27:33
  Suze: and that is to go to youtube.com/ Suze Orman, and
• 27:39
  Suze: you will find videos there that you will want to
• 27:43
  Suze: see not only of my old shows and things like that.
• 27:46
  Suze: But sometimes I appear there talking about stocks and things
• 27:50
  Suze: that we don't do on this podcast, so go there
• 27:53
  Suze: and check it out. All right, KT take us out.
• 27:59
  KT: So everybody just remember 3 things... People first.
• 28:04
  Suze: She almost forgot.
• 28:06
  Suze: You almost forgot. I can tell you forgot.
• 28:06
  KT: People first, then money, then things.
• 28:12
  Suze: Now you stay safe, strong, healthy, and secure, and we'll
• 28:16
  Suze: see you soon.