Latest / Suze Orman's Women & Money (And Everyone Smart Enough To Listen) / What Has Just Changed in the Economy

Transcript

What Has Just Changed in the Economy · Suze Orman's Women & Money (And Everyone Smart Enough To Listen)

• 0:08
  KT: Buongiorno Zuzu!
• 0:10
  Suze: Oh, you think you are just so cute.
• 0:11
  KT: So tell everyone who Zuzu is.
• 0:15
  Suze: Me.
• 0:15
  KT: Nicky, our nephew, is not even two. He's about one,
• 0:18
  KT: one and a half, and he looks at her and
• 0:20
  KT: he calls her Zuzu.
• 0:21
  Suze: Zuzu.
• 0:22
  KT: That's how he says Suze, Zuzu.
• 0:24
  Suze: But...
• 0:26
  KT: We're back from Italia. We had the most amazing birthday
• 0:31
  KT: trip for KT and Suze
• 0:34
  KT: and I are still looking at each other with like
• 0:37
  KT: stars in our eyes after listening to Andrea Bocelli sing
• 0:42
  KT: under the stars in his hometown in Tuscana. Unbelievable.
• 0:49
  Suze: KT, before you tell everybody about that.
• 0:52
  KT: Welcome to the Women and Money podcast and everybody's smart
• 0:55
  KT: enough to listen to these two fabulous... Italian girls.
• 1:01
  Suze: And what is the date, KT?
• 1:04
  KT: Agosto Due.
• 1:06
  Suze: What year?
• 1:06
  KT: August 2nd. I don't know how to do that part, 2026.
• 1:11
  Suze: Yes, and KT, I don't know if you know, but
• 1:14
  Suze: I actually posted you, um, dancing in our...
• 1:19
  KT: Oh, in our room. (KT hums a tune).
• 1:25
  KT: She, I love, can you find that song?
• 1:29
  Suze: I, they, I'll, I'll see what I can.
• 1:31
  KT: Someone out there listen to it and find that song,
• 1:34
  KT: and I will give you the best, biggest kiss on earth.
• 1:38
  Suze: What makes you even think they want a kiss from you?
• 1:42
  KT: Why not? Who wouldn't? From these sweet honey drenched lips.
• 1:46
  Suze: Anyway, welcome everybody. We are back. We had the time
• 1:51
  Suze: of our lives. Everything went perfect, perfect. Wanna tell them
• 1:58
  Suze: about it before I do a Suze School?
• 2:00
  KT: No, let me just tell you that Suze and I made,
• 2:04
  KT: I guess, a, um, a commitment to each other that
• 2:07
  KT: this would be our year of movement.
• 2:10
  KT: Because as you all know, we were on an island
• 2:12
  KT: for 14 years and pretty much stayed on the island
• 2:16
  KT: for 14 years and when we started January '26, we
• 2:21
  KT: looked at each other and said this will be a
• 2:23
  KT: year of movement and we weren't kidding.
• 2:27
  KT: We're back for a week and tomorrow, tomorrow we leave
• 2:32
  KT: to go to see the big redwoods on the Oregon
• 2:35
  KT: coast and Northern California. Cannot wait. This has been on
• 2:39
  KT: KT's bucket list forever, and Suze and I lived in
• 2:43
  KT: California forever.
• 2:45
  Suze: And we didn't see them.
• 2:46
  KT: We never had the time to go up and see
• 2:48
  KT: those big trees.
• 2:50
  Suze: But is there anything else you wanna tell them?
• 2:52
  KT: Yeah, we, we learned in Italy how to harvest honey.
• 2:56
  KT: We just, oh, and after Andrea Bocelli's concert.
• 3:01
  KT: Which finished a little bit after midnight we made our
• 3:04
  KT: way finally back to our villa, which was about an
• 3:09
  KT: hour and a half, I would say one hour and
• 3:11
  KT: a half away and like teenagers we looked at each
• 3:15
  KT: other and we have not done this. I don't think
• 3:17
  KT: we ever did this at like 2:30 in the morning
• 3:20
  KT: we ordered pizza and french fries and sat out on
• 3:25
  KT: the terrazza under the stars.
• 3:27
  KT: In the moonlight eating pizza and fries and we did
• 3:31
  KT: we post pictures of that?
• 3:33
  Suze: No, we didn't because we didn't take pictures of it, but,
• 3:35
  Suze: and we each had a spritz and I usually never ever drink.
• 3:40
  KT: She doesn't drink and I said, let's have an Aperol spritz.
• 3:43
  KT: She had a Hugo spritz,
• 3:45
  Suze: And I didn't even know what that was, but everybody,
• 3:48
  Suze: we had the time of our lives, so KT.
• 3:54
  Suze: We have to do that again, don't we?
• 3:56
  KT: Oh my goodness, I can't wait. But thank you, Suze,
• 3:59
  KT: for the best birthday gift ever because it was a surprise.
• 4:03
  Suze: Tell him what happened when you walked into the hotel room.
• 4:07
  Suze: Go on, tell themm
• 4:10
  Suze: Come on, let him know how romantic I am.
• 4:14
  KT: She's very romantic. We had a beautiful suite, as you
• 4:18
  KT: can imagine, overlooking the vineyards and the Tuscan hills and
• 4:22
  KT: the olive groves and the big double doors that opened out,
• 4:26
  KT: and on the bed, a huge beautiful bed she had
• 4:31
  KT: out of fresh rose petals, a heart.
• 4:36
  KT: Created in the middle of the bed, it was just magnificent.
• 4:40
  KT: I started crying.
• 4:42
  Suze: And then tell them what you got is a dessert.
• 4:45
  KT: So wait, so we got there in the daytime. We're
• 4:47
  KT: both hungry and she said, Let's go have lunch before
• 4:50
  KT: we go to the concert. We were going in about
• 4:53
  KT: three hours to drive out to Bocelli's home village. So
• 4:57
  KT: we went to the restaurant. There's many restaurants. We went
• 5:00
  KT: to one little one.
• 5:01
  KT: And we ordered a light lunch and she said, you know,
• 5:04
  KT: they have great desserts here. I said, no, Suze, we,
• 5:07
  KT: we don't want to eat too much before this, and
• 5:10
  KT: she said, let's just look at the menu. And they
• 5:13
  KT: brought out to my shocking surprise, a strawberry rhubarb pie
• 5:20
  KT: with a big gold candle in it, singing Happy Birthday.
• 5:25
  KT: So for all of you that don't know, I'm not
• 5:28
  KT: a birthday cake kind of gal. I love strawberry rhubarb pie.
• 5:33
  KT: I eat it once a year on my birthday, and Suze,
• 5:37
  KT: I don't know how she did it, convinced the Italian
• 5:40
  KT: pastry chefs to make an American strawberry rhubarb pie. They
• 5:46
  KT: didn't have a pie plate. They had to go buy one,
• 5:49
  KT: she said.
• 5:51
  KT: But it was the best.
• 5:53
  Suze: But we did, we had a great, great time. And
• 5:57
  Suze: before I go on to what I want to talk about, really, KT,
• 6:01
  Suze: because so much has happened this week in the stock
• 6:04
  Suze: market and everything, I decided that rather than us doing
• 6:07
  Suze: Ask KT and Suze Anything, that I should do a
• 6:10
  Suze: little mini Suze School. But the other thing I want
• 6:14
  Suze: to tell all of you is.
• 6:17
  Suze: If you want to have a really great time, seriously,
• 6:22
  Suze: and you can, on October 3rd and 4th this year
• 6:28
  Suze: in LA.
• 6:30
  Suze: Hay House is going to do an event called the
• 6:33
  Suze: Empower Event, and there will be 16 of their authors,
• 6:38
  Suze: including me, that will be teaching for two full days
• 6:44
  Suze: and it's in honor of Louise Hay's 100th birthday.
• 6:50
  KT: Oh, she's in heaven smiling at you, right?
• 6:52
  Suze: And so we'll all be there. It will be incredible.
• 6:56
  Suze: So if you want to know more.
• 6:58
  Suze: About it, go to Suze Orman.com/empower, E M P O
• 7:05
  Suze: W E R. Just do that. And for me, it's
• 7:09
  Suze: a very big deal because KT can tell you, I
• 7:13
  Suze: have not given a closing keynote address for years now.
• 7:19
  Suze: I haven't done it.
• 7:21
  KT: And for Louise...
• 7:22
  Suze: But for Louise, I was like, when they asked me
• 7:25
  Suze: how could I say no.
• 7:27
  Suze: So this will be new for me again and it's
• 7:30
  Suze: actually I'm a little scared, right, but that's all right.
• 7:33
  KT: Don't be scared.
• 7:34
  Suze: Well, I don't know...
• 7:35
  KT: She's looking down at you. She's protecting you.
• 7:37
  Suze: Like... I kind of forgot how you go on stage
• 7:40
  Suze: and dress 1000, 2000 people or how did I used
• 7:43
  Suze: to address 50,000 people and not know what I was
• 7:46
  Suze: going to say?
• 7:46
  KT: Well, it depends where you were, but you were, you,
• 7:48
  KT: you to get out there and go Chicago!
• 7:53
  KT: Louisiana! New Orleans! Wherever she was, she would shout out
• 7:59
  KT: and sing.
• 8:00
  Suze: And all. But anyway, might want to join me. I'll
• 8:03
  Suze: be the closing on October 4th, so Suze Orman.com / empower. All right my love.
• 8:11
  KT: All right, it's my turn to say arrivederci Suze,
• 8:15
  Suze: What are you going to go do now?
• 8:17
  KT: Pack for the next trip.
• 8:18
  Suze: All right, you go do that, right?
• 8:21
  KT: Ok everybody have a great time with her and listen up.
• 8:25
  Suze: All right, everybody, so what do I want you to do?
• 8:30
  Suze: I want you to take out your little Suze notebooks.
• 8:34
  Suze: Because I want you to write down some of the
• 8:36
  Suze: things that I'm going to be telling you right now. So,
• 8:41
  Suze: are you ready? Here we go. If you only watched
• 8:46
  Suze: the stock market this week, you watched it go up, down,
• 8:50
  Suze: you missed the entire story.
• 8:53
  Suze: Because when you look at what happened this week, at
• 8:56
  Suze: the end of it on Friday, the Dow finished up,
• 8:59
  Suze: the S&P finished up, the Nasdaq finished up, all three
• 9:03
  Suze: of them ended this week higher, and if that is
• 9:07
  Suze: all you saw, you think, oh, that was nice, boring.
• 9:11
  Suze: No big deal. However, I have to tell you what
• 9:15
  Suze: happened last week was a big deal. It was a
• 9:20
  Suze: seriously big deal because the real action wasn't in stocks.
• 9:27
  Suze: But it was in bonds, and what happened in the
• 9:31
  Suze: bond market this week is going to touch your mortgage,
• 9:36
  Suze: your car loan, your credit card, and your savings account.
• 9:40
  Suze: So sit down and like I said, get out your
• 9:44
  Suze: Suze notebook, for Suze School is now in session. Listen,
• 9:49
  Suze: on Wednesday, the Federal Reserve met and did what everybody expected.
• 9:54
  Suze: It wasn't a big deal.
• 9:55
  Suze: They held interest rates right where they were in a
• 9:58
  Suze: range of 3.5 to 3 and 3/4%.
• 10:02
  Suze: Now that is the 5th meeting in a row that
• 10:06
  Suze: they've done nothing. They have done nothing. They have done nothing.
• 10:13
  Suze: But here's what I need you to hear. It was
• 10:16
  Suze: not a unanimous decision.
• 10:19
  Suze: The vote was 9 to 3, and the three people
• 10:24
  Suze: who voted no were the presidents of Cleveland, Minneapolis, and
• 10:29
  Suze: the Dallas Fed banks, and they did not vote no
• 10:33
  Suze: because they wanted rates lower. No, they voted no because
• 10:38
  Suze: they wanted rates higher. Now that is a big deal,
• 10:44
  Suze: so you have to understand what I just said to
• 10:46
  Suze: you three of the most
• 10:48
  Suze: important senior people at the Federal Reserve of the United
• 10:53
  Suze: States of America looked at this economy and said we
• 10:58
  Suze: should be raising interest rates right now. Now why am
• 11:02
  Suze: I like all up in the air about it? Because
• 11:05
  Suze: you know that was like the first time since 2016
• 11:09
  Suze: that three policymakers have dissented in the same direction like that.
• 11:15
  Suze: In 10 years that makes it a big deal, and
• 11:20
  Suze: the reason is because inflation has been above the Fed 2%
• 11:26
  Suze: target now for more than five years. That's five years, everybody.
• 11:32
  Suze: And with the war in Iran, which is absolutely driving
• 11:35
  Suze: me nuts, by the way, keeping energy prices up, down
• 11:38
  Suze: all over the place, and these stupid tariffs that are
• 11:42
  Suze: out there adding to the pile, they have simply run
• 11:46
  Suze: out of patience and they want.
• 11:49
  Suze: Interest rates to go up. As you know, we have
• 11:53
  Suze: a new Fed chair by the name of Kevin Warsh,
• 11:57
  Suze: and this was only his second meeting running the show.
• 12:01
  Suze: And honestly, he was less than impressive if you ask me,
• 12:06
  Suze: but I want to tell you something about his press
• 12:09
  Suze: conference because it tells you where we are. So you know,
• 12:15
  Suze: after they go up and down with the interest rates
• 12:17
  Suze: and what they're going to do.
• 12:18
  Suze: They get in this little room and all these reporters
• 12:21
  Suze: ask him questions and he was asked about bond yields
• 12:26
  Suze: rising against him.
• 12:29
  Suze: And he said, and this is what flipped me out. Oh,
• 12:33
  Suze: he welcomed it. He said markets are learning to respond
• 12:37
  Suze: to the actual data, not to the Fed. He said
• 12:40
  Suze: the Fed doesn't always need to be the center of attention.
• 12:45
  Suze: What is he, nuts? When the Fed chair tells you
• 12:48
  Suze: he's fine with rates going up without him.
• 12:53
  Suze: I have to tell you that scares me. Why does
• 12:58
  Suze: it scare me?
• 13:00
  Suze: Because on Wednesday, last Wednesday, the moment that decision came out.
• 13:07
  Suze: And the markets heard what he said about it. The
• 13:12
  Suze: Dow dropped 800 points, 800, and the yield, this is
• 13:19
  Suze: what's important.
• 13:20
  Suze: And the yield on the 30 year Treasury bonds shot
• 13:24
  Suze: up to a level that it has not seen since 2007,
• 13:30
  Suze: and it ended up this week really around 5.25%, OK.
• 13:38
  Suze: The 10 year Treasury, and this is the one I
• 13:40
  Suze: want you to write down, topped 4.7%, the highest since
• 13:47
  Suze: January of 2025. Everybody, now why do I care so
• 13:53
  Suze: much about the 10 year Treasury, and I've told you
• 13:56
  Suze: this many, many times, because
• 14:00
  Suze: the 10 year Treasury is the tail that wags the
• 14:04
  Suze: dog of your entire financial life. It is not the
• 14:07
  Suze: Fed's rate that sets your mortgage. It's the 10 year Treasury.
• 14:13
  Suze: And here's the thing I need you to understand about
• 14:16
  Suze: why those yields are climbing, because bond investors are not stupid.
• 14:23
  Suze: They look at this Fed holding rates steady with inflation
• 14:28
  Suze: still running near 4%. They listen to what Warsh said, OK?
• 14:35
  Suze: They hear it.
• 14:37
  Suze: And they essentially say, I am not lending my money
• 14:42
  Suze: to the United States government for 30 years at a
• 14:46
  Suze: low rate when inflation might eat me alive. You have
• 14:50
  Suze: to pay me more.
• 14:52
  Suze: And when investors say pay me more, yields go up again.
• 14:59
  Suze: If investors hold their money back from the bond markets
• 15:03
  Suze: because they don't feel the yields are high enough, then
• 15:07
  Suze: the Treasury, because we're the ones lending the Treasury money,
• 15:11
  Suze: they need the money for many reasons. They need the
• 15:15
  Suze: money to fund our deficits. They need the money because why?
• 15:20
  Suze: Other bonds are coming due and they're gonna need money
• 15:23
  Suze: to pay off those bonds.
• 15:26
  Suze: So when we start holding as an investor our money back.
• 15:32
  Suze: The Treasury has to keep raising yields until money starts
• 15:37
  Suze: to flow in again and the investors say, OK, that's
• 15:42
  Suze: worth it for me to invest. So what happened this
• 15:46
  Suze: week was that the bond market voted no confidence in
• 15:52
  Suze: the Feds, but this is not a story about Wall Street.
• 15:58
  Suze: What I need you to understand is that this is
• 16:01
  Suze: a story about your kitchen table, because if you're buying
• 16:05
  Suze: a home, the average 30 year fixed rate mortgage just
• 16:09
  Suze: hit 6.66% this week, and that's up from 6.58% the
• 16:16
  Suze: week before.
• 16:18
  Suze: The fourth straight weekly increase and the biggest one jump
• 16:23
  Suze: in 10 weeks, that is the highest it has been
• 16:27
  Suze: in a full year, and I'm here to tell you
• 16:31
  Suze: that's not good.
• 16:33
  Suze: At the beginning of this year I had faith. Do
• 16:35
  Suze: you remember I said I thought interest rates would come
• 16:38
  Suze: down and all of this stuff, but then we get
• 16:41
  Suze: into the stuff with the war and we don't know
• 16:43
  Suze: how to get out of the war, and I don't
• 16:45
  Suze: know whether you agree with the war in Iran or not.
• 16:48
  Suze: We are stuck, everybody. There is no way out at
• 16:51
  Suze: this point if you ask me, and that makes it very,
• 16:56
  Suze: very dangerous for many reasons.
• 16:59
  Suze: But do you remember February, just about, I think it
• 17:02
  Suze: was five months ago before the strikes on Iran, that
• 17:07
  Suze: rate briefly slipped, the mortgage rate below 6% for the
• 17:12
  Suze: first time since 2022 and everyone got so excited, including me,
• 17:19
  Suze: and you know, the refis were all going and now
• 17:22
  Suze: it's gone just like that.
• 17:24
  Suze: So let me be very clear about what I am
• 17:28
  Suze: telling you. If you are house hunting right now and
• 17:32
  Suze: you are waiting for rates to come down before you buy,
• 17:36
  Suze: I want you to stop waiting for a number and
• 17:39
  Suze: stop looking at a payment. Can you afford this house
• 17:43
  Suze: at this rate with an 8 month emergency fund besides
• 17:48
  Suze: a 20% down payment still sitting in the bank?
• 17:52
  Suze: And still max out your retirement.
• 17:56
  Suze: If you can do that, OK, you're approved, you can
• 18:00
  Suze: buy it if you want, but if you are stretching
• 18:04
  Suze: to make it work at 6.66%.
• 18:07
  Suze: And praying you can refinance in a year. You are
• 18:10
  Suze: so denied I can't even tell you. You do not
• 18:13
  Suze: buy a house on a prayer about interest rates. Nobody,
• 18:18
  Suze: not me, not the Fed chair, nobody knows where these
• 18:22
  Suze: are going now. Some people most likely are going to
• 18:26
  Suze: tell you to take an adjustable rate mortgage to get
• 18:30
  Suze: a lower payment. Are you kidding me?
• 18:33
  Suze: The average 5 in 1 ARM and what that means
• 18:37
  Suze: is for 5 years it is fixed. An ARM is
• 18:39
  Suze: an adjustable rate mortgage for 5 years it's fixed and
• 18:43
  Suze: then every year after that it adjusts all right was
• 18:46
  Suze: running about 6.45% this week.
• 18:51
  Suze: And for most of you, I have to tell you
• 18:54
  Suze: that is a no, no, no. If you are not
• 18:57
  Suze: absolutely certain you are selling that house before the adjustment hits,
• 19:03
  Suze: you are gambling on rates falling. That is not a plan,
• 19:06
  Suze: that's just a wish. I am telling you not to
• 19:08
  Suze: do it. If you are a saver now, here, here's
• 19:13
  Suze: the gift buried in all of this bad news this week. Seriously,
• 19:17
  Suze: you are getting paid.
• 19:19
  Suze: When long term yields go up.
• 19:23
  Suze: Savers finally get something.
• 19:26
  Suze: There are high yield savings accounts now out there that
• 19:29
  Suze: are paying you 4 to 5% range. The top CDs
• 19:32
  Suze: for terms up to two years have been running roughly
• 19:35
  Suze: about 4 to 4.3%, and 20 and 30 year Treasuries
• 19:41
  Suze: are yielding above 5%.
• 19:44
  Suze: But I want you to be smart about this, everybody.
• 19:47
  Suze: The right answer isn't the biggest or the highest interest
• 19:51
  Suze: rate you can get. It's the number that matches your timeline.
• 19:55
  Suze: What do I mean by that? So money that you
• 19:58
  Suze: need in the next year or two, high yield savings
• 20:02
  Suze: or short-term CD, OK, or a short treasury bill, no problem.
• 20:07
  Suze: And you compare because the spread between the best and
• 20:11
  Suze: the worst bank out there is enormous, and your big
• 20:15
  Suze: brand banks seriously, are very likely paying you almost nothing.
• 20:23
  Suze: So you can't leave money in a bank anymore. You cannot,
• 20:28
  Suze: if they're paying you 1%, 0.5%.
• 20:31
  Suze: You are losing money. You are losing it given what
• 20:34
  Suze: inflation is, so you have to move it to a
• 20:38
  Suze: high yield money market account or money market fund or
• 20:42
  Suze: savings account or a short term CD or whatever, but
• 20:46
  Suze: you should not be getting less than 3% on your
• 20:49
  Suze: money no matter where it happens to be. Now, money
• 20:53
  Suze: that you don't need for 4 years or more, I
• 20:56
  Suze: have to tell you, I think that's where Treasuries start
• 20:59
  Suze: pulling ahead.
• 21:00
  Suze: And you have to remember that Treasury interest is exempt
• 21:04
  Suze: from state and local income tax New Yorkers. Think about that.
• 21:10
  Suze: So if you live in a high tax state, make
• 21:13
  Suze: sure you look at treasuries and compare them to CDs
• 21:18
  Suze: because CDs are totally
• 21:20
  Suze: taxable on the state and federal level. Treasuries are only
• 21:25
  Suze: taxable on the federal level. And listen, if you like
• 21:30
  Suze: the 30 year bond right now because the yield is
• 21:34
  Suze: amazing and it is, and you really think rates are
• 21:37
  Suze: going to come down, OK.
• 21:41
  Suze: You can do that, but don't bet the house on it,
• 21:45
  Suze: all right? Little by little. Now, if you have credit
• 21:49
  Suze: card debt...
• 21:51
  Suze: Nothing changed for you this week, and that's the point.
• 21:55
  Suze: Your rate is still brutal. Are you kidding me again?
• 21:59
  Suze: The Fed isn't riding to your rescue. They don't even
• 22:02
  Suze: care about you if you ask me. And every single
• 22:06
  Suze: month you carry that balance. You are paying a tax
• 22:09
  Suze: on your own future. Do you get that?
• 22:12
  Suze: So before you do anything, you have to attack the
• 22:15
  Suze: highest interest rate first. That's a guaranteed return that no
• 22:19
  Suze: treasury or bond in the world can beat. So I've
• 22:23
  Suze: never understood it. People always ask, Suze, where can I
• 22:27
  Suze: get the highest rate? What should I do with my money?
• 22:30
  Suze: And I say, Do you have credit card debt? And
• 22:32
  Suze: they said, Yes. I said, Well, what's your interest rate?
• 22:36
  Suze: They go 18%, 21%.
• 22:39
  Suze: I go, you have money sitting in an account that
• 22:43
  Suze: maybe is going to be making 3 or 4% taxable,
• 22:47
  Suze: and yet you could take that money and pay down
• 22:49
  Suze: an 18 or 20% interest rate that is non-tax deductible
• 22:56
  Suze: that you'll never get ahead. So either you have money
• 22:59
  Suze: or you don't, but if you have debt, you are
• 23:02
  Suze: to get rid of it as soon as you can.
• 23:04
  Suze: Do you hear me?
• 23:07
  Suze: Now, just a little switch up here for a little,
• 23:09
  Suze: you know, if you did watch the markets, the stocks
• 23:12
  Suze: this week, they were enough also to drive you crazy,
• 23:16
  Suze: even though they kind of ended up all right.
• 23:19
  Suze: Because the big technology companies, as you may know, they
• 23:23
  Suze: reported this week, and that's where everybody was waiting to
• 23:27
  Suze: see what was going to happen to Microsoft, what was
• 23:30
  Suze: gonna happen to Amazon, what were their earnings going to be.
• 23:34
  Suze: So Microsoft came out and they came out with strong earnings.
• 23:39
  Suze: Amazon came out and also had strong earnings, and the
• 23:44
  Suze: stock jumped double digits, OK, but then there was Apple.
• 23:49
  Suze: My favorite stock and apple beat expectations on most of
• 23:55
  Suze: the big numbers. Please notice I just said most.
• 23:58
  Suze: Most of them, and the stock slid about 7%. Why?
• 24:05
  Suze: Because the China business and the services business came in
• 24:08
  Suze: weaker than people wanted.
• 24:11
  Suze: And when a stock has been priced for perfection, which
• 24:15
  Suze: Apple was very good, is a failure.
• 24:20
  Suze: That's not a statement about Apple. That's a statement about expectations,
• 24:26
  Suze: and it is exactly why I do not want you
• 24:29
  Suze: buying individual stocks with money you need in less than
• 24:33
  Suze: five years, because if you're buying a stock in the
• 24:37
  Suze: hopes that it's going to go up right away and
• 24:38
  Suze: you're going to make money on it and whatever it
• 24:40
  Suze: may be, in a second I'm going to address SpaceX
• 24:45
  Suze: because that is a lesson in itself.
• 24:48
  Suze: So, what do you actually do with everything that I've
• 24:52
  Suze: just told you? OK, what do you do with it?
• 24:55
  Suze: Here's what I want you to do. One, do not
• 24:58
  Suze: touch your retirement portfolio because of one week.
• 25:02
  Suze: Not one thing if you are still working and contributing
• 25:05
  Suze: every month. A market that goes down is a market
• 25:08
  Suze: where your money buys more shares. That is a gift,
• 25:11
  Suze: not a crisis. Do you get that? Number two: You
• 25:15
  Suze: have got to check what your bank is paying you
• 25:18
  Suze: on your savings, not next weekend, not in a few days,
• 25:22
  Suze: but today.
• 25:23
  Suze: Because if your emergency fund is sitting somewhere earning, like
• 25:27
  Suze: I said earlier, 0.5%, while other institutions are paying 4
• 25:32
  Suze: or 5%, you are giving away free money. And in
• 25:36
  Suze: this type of an economy, everybody, seriously, you cannot afford
• 25:43
  Suze: to give away free money. That is just plain stupid, OK.
• 25:49
  Suze: Three: if you've been sitting on a home purchase waiting
• 25:53
  Suze: for rates to fall again, I want you to recalculate
• 25:57
  Suze: the payment at today's number and decide honestly whether you
• 26:01
  Suze: can afford it or not. You have to know not
• 26:06
  Suze: whether you can afford it if things get better, but today,
• 26:10
  Suze: and I want you to look at your debt.
• 26:14
  Suze: And I really want you to promise me and yourself
• 26:17
  Suze: you are gonna do everything you can to get out
• 26:21
  Suze: of credit card debt. So when I say debt here,
• 26:25
  Suze: I'm meaning credit card debt. All right, now I mentioned
• 26:30
  Suze: I was gonna talk to you about SpaceX, and I
• 26:34
  Suze: want to because
• 26:36
  Suze: for two solid years I heard from you about this,
• 26:41
  Suze: the emails, the letters, Suze, how do I get pre-IPO shares? Suze,
• 26:47
  Suze: my brother-in-law's friend, has access to a fund that owns
• 26:50
  Suze: a piece of SpaceX. Should I put in $50,000? Suze,
• 26:54
  Suze: is there any way in? Am I too late?
• 26:58
  Suze: You were all so worried that you missed out. You
• 27:02
  Suze: were terrified that the biggest thing of your lifetime was happening,
• 27:06
  Suze: and you were on the outside of it.
• 27:10
  Suze: So let's see, did you, or did you not miss
• 27:13
  Suze: out on SpaceX?
• 27:16
  Suze: On June 11th of this year, SpaceX priced its offering
• 27:22
  Suze: at $135 a share.
• 27:26
  Suze: It was the largest IPO in the history of the world.
• 27:31
  Suze: $75 billion raised. Elon Musk became the world's first trillionaire
• 27:38
  Suze: on paper anyway, for a minute.
• 27:41
  Suze: On June 12th, one day later, everybody.
• 27:46
  Suze: It opened for trading at $150 not $135. Now most
• 27:55
  Suze: could not buy it at $135. That price was for
• 27:59
  Suze: the institutions, but regular people got in at $150 and up.
• 28:05
  Suze: And it went up and up. It went straight up
• 28:10
  Suze: and at one point that first day it touched $193
• 28:15
  Suze: and the company was briefly worth more than $2.25 trillion.
• 28:20
  Suze: However, it closed the day at 160, up 19%.
• 28:27
  Suze: Now if you were watching CNBC that afternoon, you would
• 28:31
  Suze: have thought this is it. I knew it. I missed it.
• 28:36
  Suze: Now, let me tell you where that stock closed last Friday.
• 28:41
  Suze: Can you guess? Have you been watching it? Have you
• 28:44
  Suze: noticed nobody's talking about SpaceX anymore?
• 28:47
  Suze: It closed at $108 a share. So think about this,
• 28:53
  Suze: if you bought it that first day as high as $193.
• 28:58
  Suze: And trust me, somebody did, somebody always does. You are
• 29:02
  Suze: down 44% right now.
• 29:05
  Suze: If you bought it at the opening trade of 150,
• 29:09
  Suze: you're down about 28% right now. If you were lucky
• 29:14
  Suze: enough to get shares at 135.
• 29:18
  Suze: You're still down 20%, and that's in seven weeks and
• 29:23
  Suze: it's not because nobody wanted it. This stock got added
• 29:27
  Suze: everybody to the Nasdaq 100, the Russell 1000, which means
• 29:32
  Suze: every index fund in America had to go out and
• 29:36
  Suze: buy it. That's a wave of forced buying that normally
• 29:41
  Suze: lifts a stock, right?
• 29:44
  Suze: That's what you were all betting on.
• 29:47
  Suze: But it fell anyway, so what's the lesson here?
• 29:51
  Suze: And I want you to sit with it, because it
• 29:54
  Suze: is not the lesson that you may think.
• 29:59
  Suze: The lesson is not SpaceX is a bad company. Listen,
• 30:04
  Suze: I have no idea what SpaceX is going to be
• 30:07
  Suze: worth in 10 years, and I have to tell you,
• 30:09
  Suze: neither do you. Neither do the 27 analysts with price
• 30:13
  Suze: targets on this thing that run all the way from
• 30:16
  Suze: $62 a share to $800. Yeah, I said that right, $800.
• 30:22
  Suze: The lesson is this...
• 30:24
  Suze: Being right about the company is not the same as
• 30:29
  Suze: being right about the price you paid for it. You
• 30:33
  Suze: could have been completely, totally correct, really, that SpaceX will
• 30:37
  Suze: change the world and still lose 44% of your money
• 30:42
  Suze: on paper anyway because you bought it on the single
• 30:45
  Suze: most emotional afternoon in its history.
• 30:49
  Suze: You know, I remember way back when in 2012 Facebook
• 30:53
  Suze: did the same thing. It traded below its IPO price
• 30:59
  Suze: for more than a year, and the people who panicked
• 31:03
  Suze: and sold miss out on gains north of 1,600%. Uber,
• 31:10
  Suze: the exact same thing.
• 31:13
  Suze: So that cuts both ways. The company can be fine,
• 31:17
  Suze: and the entry price can still be a disaster for years.
• 31:22
  Suze: So here's the question Can you hold something for three
• 31:26
  Suze: years while it's down 40% and your neighbor is telling
• 31:31
  Suze: you what an idiot you were, because that's the actual
• 31:35
  Suze: question at hand, and nobody asks it in June when
• 31:40
  Suze: the confetti is falling.
• 31:42
  Suze: They don't think about that, so that panic that you
• 31:46
  Suze: felt for two years, do you understand now that that
• 31:49
  Suze: was manufactured? Every how to get pre-IPO access article, every
• 31:56
  Suze: fund charging you a fee for a sliver of a sliver,
• 32:00
  Suze: every breathless segment about the biggest offering in history, all
• 32:05
  Suze: of that was engineered to make you feel late.
• 32:10
  Suze: And I need you to hear the most important sentence
• 32:13
  Suze: in this whole thing of what I'm telling you. There
• 32:16
  Suze: is no such thing as missing out on a stock.
• 32:21
  Suze: It trades every single day for the rest of your life.
• 32:25
  Suze: The only thing you can actually miss out on.
• 32:29
  Suze: Is your emergency fund.
• 32:32
  Suze: Your retirement contribution.
• 32:34
  Suze: Getting out of debt and your sleep.
• 32:38
  Suze: Now if you happen to sit this one out because
• 32:41
  Suze: you didn't understand it, you weren't slow, you weren't uninformed,
• 32:46
  Suze: you were simply disciplined you didn't do something you didn't understand,
• 32:51
  Suze: but if you cashed out a CD for this, if
• 32:54
  Suze: you put in money you needed for a down payment,
• 32:57
  Suze: if you have to check the price before you can
• 33:00
  Suze: enjoy your dinner, then this was never an investment, everybody.
• 33:04
  Suze: It was a feeling, and you paid $193 for it.
• 33:10
  Suze: So if you have spent the last two years feeling
• 33:13
  Suze: like you were locked out of something enormous, look at
• 33:17
  Suze: the screen as of Friday's close at 108. You weren't
• 33:22
  Suze: locked out. I want you to think about this. You
• 33:25
  Suze: were protected by the very thing you were embarrassed about,
• 33:30
  Suze: which was not having access. Can you really understand what
• 33:35
  Suze: I am trying to say to all of you?
• 33:39
  Suze: You all wanted to follow the crowd. You wanted to
• 33:43
  Suze: all be part of something.
• 33:46
  Suze: However, if you did buy it and now you are down,
• 33:51
  Suze: the question becomes why did you buy it.
• 33:55
  Suze: If you thought it was a great company, then you
• 33:58
  Suze: should be dollar costs averaging into it for the long run,
• 34:02
  Suze: even if that means you have to hold it for
• 34:05
  Suze: five or 10 years. But if you bought it to
• 34:09
  Suze: make a quick buck with money that you needed.
• 34:14
  Suze: Well, hopefully you learned a great lesson, and now the
• 34:18
  Suze: question is what are you going to do, and I
• 34:22
  Suze: have to say I'll let you answer that question for yourself.
• 34:27
  Suze: So that brings us to the end of a Suze
• 34:31
  Suze: School and a little brief intro from Miss KT. Remember everybody,
• 34:36
  Suze: go to Suze Orman.com/empower, E M P O W E
• 34:41
  Suze: R to check out the event that's happening on October
• 34:45
  Suze: 3rd and 4th in LA.
• 34:47
  Suze: I hope if you're around that area or if you
• 34:49
  Suze: even want to come there, you can all make it
• 34:53
  Suze: and see me. I'm the last closing talk on October 4th,
• 34:59
  Suze: so I hope I get to see you and if not, no,
• 35:03
  Suze: there's only one thing that I want you to remember
• 35:05
  Suze: when it comes to your money, and it is this
• 35:07
  Suze: people first, then money, then things. Now you stay safe.
• 35:13
  Suze: Bye bye.