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Classic Suze School: Shattering The Money Myths · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

0:07
Robert: October 29th, 2026. Welcome to the Women and Money podcast
0:12
Robert: as well as everyone smart enough to listen. Hi there.
0:16
Robert: It's Robert, the producer here. For today's classic Suze School,
0:19
Robert: we're gonna go back to the early days of the
0:21
Robert: podcast where Suze shatters some of the myths and mistakes
0:25
Robert: that we make with money. We'll have a brand new
0:28
Robert: Suze School for you this coming Sunday, but for now,
0:32
Robert: here we go...
0:37
Suze: I thought maybe today we could all go to Suze
0:40
Suze: School and I could just talk to you about these
0:44
Suze: things that I keep seeing that you're getting wrong. Right,
0:47
Suze: the first one, can we just all get that a
0:51
Suze: Roth is not an investment.
0:54
Suze: You write in and you tell me you funded your Roth.
0:59
Suze: And I go, well, what's it invested in? And you say,
1:02
Suze: it's at the Roth, Suze. I put it in a Roth.
1:06
Suze: And I'm like, yes, but what are you investing in
1:09
Suze: within your Roth account? And you say, well, why do
1:12
Suze: I have to invest in anything? A Roth is a Roth, right?
1:16
Suze: No, a Roth is like a house. An IRA is
1:22
Suze: like a house. Remember, a Roth is an after-tax individual
1:26
Suze: retirement account, a traditional retirement account, a traditional IRA is pre-tax.
1:34
Suze: Either one of those is just like a house.
1:38
Suze: And you can get a house, but you need to
1:41
Suze: move furniture into the house. You need to put things
1:44
Suze: in the house for you to be able to live
1:46
Suze: in that house unless you just want that house to
1:48
Suze: be an empty house. So when you have a Roth
1:53
Suze: or a traditional IRA, that is your house that holds
1:57
Suze: your money for retirement, you have to make investments in
2:03
Suze: that account.
2:06
Suze: Next, you keep asking me and telling me, well, Suze,
2:10
Suze: I'm funding my employer sponsored plan and employer sponsored plan
2:16
Suze: is when you work, you're an employee, you work for somebody,
2:20
Suze: and they offer you a 401k or a 403B or
2:24
Suze: a TSP.
2:26
Suze: And you write me and you say, well, I have
2:29
Suze: a retirement account, so I know I can't have a Roth.
2:32
Suze: So should I have a Roth or a traditional IRA
2:36
Suze: or should I keep funding my employer sponsored plan? Everyone,
2:41
Suze: you can have both. You can have an employer sponsored
2:47
Suze: plan and you can have a Roth or a traditional IRA.
2:55
Suze: Now, it's true that I don't like whole life insurance policies. I,
3:02
Suze: I actually hate them. I don't like universal life insurance
3:07
Suze: policies or variable life insurance policies. The main insurance policy
3:13
Suze: that I like is term insurance, and I don't like
3:17
Suze: policies that say, all right, you can have insurance and
3:22
Suze: investing in one. I don't like it.
3:25
Suze: And I've told you that over and over again, but
3:28
Suze: that doesn't mean that you should go out and just
3:31
Suze: cancel your whole life insurance policy. If you need insurance
3:37
Suze: on somebody, and you need to know if you need it,
3:41
Suze: because maybe you are financially dependent on that person or
3:45
Suze: other people are financially dependent upon you.
3:48
Suze: So before you ever cancel a whole life insurance policy
3:53
Suze: or a universal or a variable life insurance policy, can
3:56
Suze: you just get a term life insurance policy in place?
4:01
Suze: Can you just do that?
4:03
Suze: Now, if you have an elderly parent, and they happen
4:08
Suze: to have a whole life insurance policy, which many of
4:11
Suze: your elderly parents, especially if they're in their 80s or 70s,
4:15
Suze: they may have.
4:17
Suze: Be very careful before you cancel them because it's going
4:22
Suze: to be too expensive for you to get term insurance
4:26
Suze: when they are 70 or 80. And if you've already
4:30
Suze: been paying in it or they've already been paying, and
4:33
Suze: they're not doing very well, they're not healthy, think twice
4:37
Suze: before you cancel it. Do you understand that?
4:41
Suze: Because recently, I had somebody write in, where her mother
4:46
Suze: was paying like $92 a month on one policy, maybe
4:50
Suze: $70 or something like that on another policy. It had
4:54
Suze: a cash value on it of just a few thousand dollars
4:58
Suze: and she had been doing this for years and years,
5:00
Suze: and the death benefit was, I think, $11,000 on one
5:03
Suze: and maybe $7,000 on another, and she canceled it.
5:08
Suze: And then she wrote me and she said, Suze, I'm
5:10
Suze: not sure that I did the right thing because my
5:14
Suze: mother is, you know, living with me. She's getting, she
5:18
Suze: has dementia, she's now stopped eating, she's not well. I
5:21
Suze: don't know. Should I reinstate it?
5:25
Suze: Never ever cancel a policy on somebody who is older
5:30
Suze: and not doing well. They're not healthy. For that, you
5:35
Suze: may really want to just keep paying it. So can
5:38
Suze: you just think twice before you do something? When you
5:41
Suze: hear me say, I don't like something, that doesn't mean
5:44
Suze: just go out and cancel it. Every one of you
5:46
Suze: is in a different situation.
5:48
Suze: In a different circumstance, think twice about it in your
5:53
Suze: particular situation, all right? Now, a lot of you are
5:57
Suze: looking for financial advisors and you're thinking you can't do
6:01
Suze: it on your own and you're out there and you're
6:04
Suze: finding financial advisors that are charging you 1.7% or 2%
6:10
Suze: in fees to manage your money and you're writing me
6:15
Suze: and asking me, is that a lot of money?
6:18
Suze: So, here's what I want you to know. You are
6:22
Suze: never to pay more than 1% when you use a
6:25
Suze: registered investment advisor, and a registered investment advisor is somebody
6:30
Suze: that you give your money to, let's say it's $100,000
6:35
Suze: and they charge you a percentage. Again, it should never
6:38
Suze: be more than 1%.
6:40
Suze: The more money you give them, the less the percentage
6:43
Suze: should be. So if you are going to give them
6:46
Suze: $5 million, $10 million, whatever it is, it should be
6:49
Suze: less than if you're giving them $100,000 or $200,000. However,
6:53
Suze: here's how it works. You give them $100,000 they invest
6:59
Suze: your money for you, but they invest in items such
7:02
Suze: as stocks that have no fees on them whatsoever to
7:07
Suze: invest in.
7:09
Suze: So if they take that $100,000 up to $200,000 they're
7:14
Suze: now making 1% of $200,000.
7:17
Suze: If they take your $100,000 down to $50,000 they're now
7:22
Suze: making 1% of $50,000. So the more money they make you,
7:26
Suze: the more money they make themselves. But you don't want
7:30
Suze: a registered investment advisor who buys mutual funds because within
7:34
Suze: mutual funds, you're paying an expense ratio for the portfolio
7:39
Suze: manager of that mutual fund to manage the money, so
7:44
Suze: you don't want to do that.
7:46
Suze: You also do not want an investment adviser who if
7:51
Suze: you're going to put your money into individual bonds, you
7:55
Suze: do not want that adviser to be charging you an
7:59
Suze: investment advisory fee at all. That is money that needs
8:04
Suze: to be kept in a separate account. Why? Because when
8:09
Suze: you buy a bond, a bond already has the commission
8:13
Suze: built into it.
8:15
Suze: So why pay an investment advisory fee on that when
8:18
Suze: you've already paid a commission? If you're going to use
8:21
Suze: a registered investment advisor and you're going to need to
8:25
Suze: buy individual bonds as well as individual stocks, you should
8:30
Suze: have two accounts. The account that has the stocks in
8:34
Suze: it gets the investment advisory fee put on it.
8:37
Suze: Again, absolutely no commissions whatsoever to buy or sell, and
8:41
Suze: the account that has the bonds in it just has
8:44
Suze: the bonds in it because the commission has already been
8:46
Suze: paid when you bought it. So many of you are
8:50
Suze: confused about that. I hope that cleared that up.
8:55
Suze: Next, so many of you are writing me about the
8:59
Suze: order of the debt that you should pay off.
9:02
Suze: You have student loan debt, you have credit card debt, you,
9:06
Suze: you know, those are the main two debts that you have.
9:08
Suze: You have car loan debt, mortgage debt, but forget those
9:10
Suze: debts for now. Your main question is, should you pay
9:15
Suze: off student loan debt first or credit card debt first?
9:20
Suze: The answer to that question is if you have extra money,
9:24
Suze: obviously you need to keep paying on both of them,
9:28
Suze: but if you have extra money, can you funnel that
9:30
Suze: extra money towards your student loan debt? The reason being
9:35
Suze: student loan debt is not dischargeable in most cases in bankruptcy.
9:41
Suze: That is the most dangerous debt currently that you can have.
9:46
Suze: Please do not hold out in the hopes that one
9:49
Suze: day student loan debt is just going to be discharged,
9:52
Suze: that somebody's going to get in office and just say,
9:55
Suze: all right, all of you, you don't have to pay
9:58
Suze: your student loan debt anymore. Can you not think that
10:01
Suze: is going to happen? Listen, I would love for those
10:05
Suze: of you who can't afford to pay your student loan debt, really.
10:09
Suze: I would love for that to happen for you. For
10:11
Suze: those of you who can really afford to pay your
10:13
Suze: student loan debt, I would like you to be able
10:15
Suze: to continue to pay your student loan debt. I am
10:18
Suze: not somebody who thinks all student loan debt should just
10:21
Suze: be forgiven because I don't think that would ever pass. However,
10:24
Suze: do not, and I repeat, do not think that is
10:28
Suze: going to happen. And if it does happen, it will
10:30
Suze: be a long time in my opinion before it actually does.
10:36
Suze: Next, so many of you have been told that all
10:39
Suze: you need is a will. In fact, many of you
10:43
Suze: have been told that if all the money that you
10:45
Suze: have is in a retirement account, or your insurance policy,
10:50
Suze: you do not need even a will, because if you
10:53
Suze: just simply designate on your insurance policy, a beneficiary on
11:00
Suze: your retirement account, a beneficiary, even on your savings account,
11:05
Suze: if it's a pay on death account or a transfer
11:07
Suze: on death account where you in fact name a beneficiary,
11:11
Suze: it is true that all of those assets will absolutely
11:16
Suze: pass to your beneficiary without probate, but there are other
11:21
Suze: things that need to be taken into consideration.
11:25
Suze: A will is there if you have minor children to
11:29
Suze: appoint who is going to be guardian over your minor children.
11:34
Suze: It is also there in case you have things that
11:37
Suze: aren't put in your living revocable trust, which every single
11:41
Suze: one of you should absolutely have. How many times do
11:45
Suze: I have to tell you this?
11:46
Suze: The most important thing all of you could ever do
11:50
Suze: is to have a trust, a will, an advanced directive,
11:54
Suze: and a durable power of attorney for healthcare, and a
11:57
Suze: power of attorney for your finances. You need all of
12:00
Suze: those documents. Those are must-have documents. Now, if you want,
12:08
Suze: I have the must-have documents. Obviously, I am selling them.
12:12
Suze: And I don't feel bad that I'm sitting here telling
12:15
Suze: you that you should buy these because how many of
12:18
Suze: you really have a lawyer that you know you can trust?
12:22
Suze: How many of you really have $2,500? And even if
12:25
Suze: you did have $2,500 why would you want to spend
12:28
Suze: it when you could get the state of the art
12:30
Suze: documents that were created by my own trust lawyer? Millions
12:34
Suze: of these have been sold. They're good in all 50 states.
12:37
Suze: They're so easy to use. So why don't you check
12:39
Suze: them out just by going to Suze Orman.com/offer, and that
12:44
Suze: is where you will find the must-have documents that all
12:47
Suze: of you really, in my opinion, should have.
12:50
Suze: And why do I think all of you should have
12:53
Suze: them again? A will, as I said, is just for
12:56
Suze: those items that you haven't put in a trust. So
13:00
Suze: why do you need a trust? Listen, a trust isn't
13:03
Suze: just so that you can pass everything to your beneficiaries
13:06
Suze: without probate, OK?
13:08
Suze: It's also there in case you have an incapacity. Who's
13:11
Suze: going to write your checks for you? Who's going to
13:13
Suze: pay your bills? There's all other kinds of reasons that
13:16
Suze: you should have a trust. Go back and listen to
13:18
Suze: one of the podcasts that talk all about trust. And
13:22
Suze: while I'm speaking about this, another thing is that a
13:25
Suze: lot of you are writing me and you're saying you
13:28
Suze: don't want a trust. So what you're gonna do is
13:30
Suze: you're going to gift your appreciated assets to your kids
13:34
Suze: simply to avoid probate, and you're gonna do that by
13:37
Suze: simply putting the house or whatever you have in their name.
13:42
Suze: Please don't do that. If you do that, you may
13:45
Suze: be making one of the biggest mistakes out there. Let's
13:47
Suze: say you have a home.
13:49
Suze: And you put it in your kids' names or you
13:51
Suze: add your kids to the title of your house. So
13:54
Suze: it's a public record and now your kids are out
13:57
Suze: and they're in a car accident and they seriously injure
14:00
Suze: somebody or they even kill somebody. So if lawyers wanted to,
14:04
Suze: they could come and take your house from you if
14:07
Suze: they sue you. So don't do that.
14:10
Suze: The other reason you don't want to do it is
14:12
Suze: recently somebody wrote in, and they said to me, Suze,
14:16
Suze: my parents gifted me a house that their parents gifted
14:21
Suze: to them years ago, and now the house is worth
14:26
Suze: $80,000 or $900,000 and my name is on the house.
14:32
Suze: My parents are about to die. How much income tax
14:35
Suze: am I going to owe?
14:36
Suze: If the house had simply been passed down via a
14:40
Suze: trust from grandparents to parents, the parents would have gotten
14:45
Suze: a step up in cost basis. So if the grandparents
14:47
Suze: bought it for $5,000 and the house when they died
14:50
Suze: was worth $30,000 their new cost basis would be $30,000.
14:55
Suze: They could turn around and they could sell it if
14:57
Suze: they wanted to, no tax.
15:00
Suze: However, now, and by the way, those are the actual numbers,
15:04
Suze: the house now has been gifted to the child. Her
15:09
Suze: cost basis is $5000 on this house because that cost
15:14
Suze: basis gets passed down and now.
15:17
Suze: It's not even her primary residency. She's going to owe
15:21
Suze: income tax on the difference between that and whatever she
15:25
Suze: sells it to. Now, obviously, she's put money into the
15:28
Suze: house or they've put money into the house over all
15:30
Suze: these years, but I don't think they've put $80,000 or
15:32
Suze: $900,000 into this house. So if you really care about
15:37
Suze: saving money.
15:39
Suze: Then leave your seriously appreciated assets when it's gone from
15:45
Suze: $30,000 to $200,000 but leave appreciated assets to your beneficiaries
15:51
Suze: via a trust.
15:53
Suze: I want to talk about bankruptcy. Many of you are
15:56
Suze: writing in and you're telling me that you have $80,000
15:59
Suze: of credit card debt, you have $100,000 of credit card debt,
16:03
Suze: but you are just so ashamed to claim bankruptcy.
16:06
Suze: Listen, if you make less than what you owe, you
16:12
Suze: are technically bankrupt. So what does that mean? That means
16:17
Suze: you're never gonna get out of it.
16:19
Suze: So, please don't be ashamed if you have to claim bankruptcy.
16:24
Suze: The only part that you should be ashamed about is
16:27
Suze: if you do it again, because do you know that
16:30
Suze: one out of two people who claim bankruptcy claim it twice.
16:34
Suze: So you have to think about that and do not
16:37
Suze: go out there charging all of this stuff simply because
16:40
Suze: you think, well, I don't care. I'm just going to
16:42
Suze: claim bankruptcy on it. Those are not the people that
16:45
Suze: I'm talking about. I am talking about people who, all right,
16:49
Suze: they charged too much and then they lost their job,
16:52
Suze: and then they got into medical debt, and then they
16:54
Suze: just started to accumulate all this stuff and before you
16:56
Suze: know it, now they have $80,000 or $50,000 and they're
17:00
Suze: making $30,000 a year or $40,000 a year or they're
17:03
Suze: not making anything.
17:05
Suze: So the main thing about this is there's no shame
17:08
Suze: in you claiming bankruptcy. If you have to do it,
17:11
Suze: you have to do it, but just do it because
17:14
Suze: prolonging it isn't going to help things whatsoever.
17:19
Suze: And last but not least, can we just talk about
17:23
Suze: FICO scores and what you need to get is you
17:27
Suze: are not to continue to care more about your FICO
17:32
Suze: score than you are the quality of your life.
17:35
Suze: You're writing me and you're telling me that you're taking
17:40
Suze: money out of your retirement accounts simply to pay the
17:44
Suze: minimum payment due on your credit cards just so you
17:48
Suze: could have a good FICO score? I don't think so.
17:52
Suze: You can always rebuild your FICO score or your credit score,
17:57
Suze: but what you have to understand about retirement accounts is
18:02
Suze: this retirement accounts are safe and sound if you do
18:08
Suze: claim bankruptcy. So they're not part of a bankruptcy. They
18:12
Suze: can't take it from you. So if you're really doing
18:16
Suze: poorly and you don't know how you're going to pull
18:18
Suze: things out, you really want to put as much money
18:20
Suze: into a retirement account as you possibly can, because nobody
18:25
Suze: can ever take that away from you.
18:27
Suze: So stop taking money out of your retirement account to
18:31
Suze: pay the minimum payment due on your credit cards, and
18:35
Suze: then tell me, but it looks like you're going to
18:37
Suze: have to claim bankruptcy after all. That's a serious mistake.
18:41
Suze: So just don't do that.
18:43
Suze: All right, everybody, 'till next week, you stay safe.