Suze Orman: The 5 Money Moves You MUST Make Right Now | Ultimate Financial Advice (Part 1)

This is to simply be your financial wake up call, a call that wants you to be in control of your destiny. Today's webinar I want it to be about let's get rid of your fear, let's get into action and let's do the things in every one of our lives starting today, that we can control and therefore profit from. here's really what I think is important when it comes to the stock market

the biggest mistake you will ever make, and you probably are making it or you have made it, is when in fact you stop investing. You sell, you get out. You let fear dictate the moves that you make that you can't do that everybody, if you do that, you are never, ever going to build wealth. Do you know that in the past 40 years, since they started to track, the Standard and Poor's 500 In those 40 years, there were 33 up years and only seven down years. Just seven. Every one of them roared back. So do not. Do not let fear dictate and keep you from making the money you deserve to make. So you may think, oh, it's the knowledge I have. It's the education I have and that's what will make me money. Oh, no. If you are afraid you will sell at the wrong time, you will buy it the wrong time. You have got to control your emotions and the biggest emotion that is dictating failure right now and finances is you're afraid. You hear all these things on the TV, all these pundits, everybody saying everything's going to crash. Wrong. Now listen to me again closely. normally the markets will go up more over a period of time, then they will go down. overall the tilt of the market is always up. Oh, it can go down for maybe 1. 4 years or so, but normally it will go up for at least five years. So this is the time that I do not want you to stop investing in your 401k. This is the time, I do not want you to sell out of great stocks and ETFs that you happen to own. I want you to continue to invest month in and month out when it goes down. And by the way, what is wrong with all of you when the markets go down of course this is the time you should be buying things that are good. It's not the time for you to be selling. So you're doing exactly what the traders and the people that want to profit off of you want you to do. But not on my watch. So as long as you have at least five years or longer, preferably longer, until you need this money, as long as you can consistently dollar cost average into the market, take a sum of money and do it every little, every month, I do not want you putting a lump sum in this market right here, not now. If you could just do those things, know what you're investing in. I'm telling you, over the long run you will make money. What's known

right now to all of you? You know that we are currently in the lowest income tax brackets of your lifetime. That is known. What is unknown? What's unknown is what are the tax brackets going to be later on in life. And so many of you go, oh, I want the tax write off now. I need it now. Later on I'm going to be, you know, in a lower tax bracket. How do you know that is the unknown. And let me tell you why. I think you probably, as time goes on, may be in a higher and higher tax bracket, which is why I want you all to be doing a Roth 401k a Roth 403b, a Roth TSP. A Roth IRA, I want you to give up these stupid, and they are, these stupid tax write offs today. Don't you all understand that as your money is in there, it's compounding and it's growing and who is it growing for? It is growing for Uncle Sam. So later on in life, when you go to take it out, you're going to have to take out large sums. It's mandatory. Oh, you die and leave it to your kids. They may be in a higher tax bracket and therefore they're forced to take it out as well. They're going to pay heavy taxes. Roth is the way to go. And again, here is the reason why. We have something known as artificial intelligence. And artificial intelligence in my mind is changing everything. And it is very possible. It is very probable that a lot of white collar workers, all kinds of workers, are going to not be needing to work anymore because their employers will replace them by artificial intelligence. Now, when that happens, I want you to think about this closely. More and more people will not be paying into the tax system at the exact same time that you have the baby boomers and everybody collecting what? Social Security, doing all these things. So what is going to happen? Most likely tax brackets are going to have to go up. Do you know that when I first started, the highest tax bracket at that time was 70%? Don't think, everybody, that can't happen again. So therefore, very briefly, what I really want you to do is do Roth 401ks, Roth anything. And if you can and you qualify for it, do a Roth IRA and a Roth 401k, whatever it may be. For those of you, I just want to say, who have money in a traditional 401k or TSP or whatever it may be, and now you want to transfer that money within your corporation to a Roth, be careful, because when you do so it's taxable that year as ordinary income. So do it little by little. Just sign up tomorrow. Really just sign up right away. Your new contributions should go into the Roth. And everybody check out if you qualify for a Roth IRA. On my podcast, the Women and Money podcast, and you all should be listening to it if you're not, there's a podcast called Don't Be Partners with Uncle Sam that goes into great, great detail as to why you should do Roths. I promise you, after you listen to that one podcast, you will never do a traditional retirement account again, which is pretax.

All right, I've been thinking about this for a long time. You know, I was on Erin Burnett Show on CNN and she asked me this one question, Suze, what keeps you up at night? And I said, insurance. She said, what are you talking about? I said, you know, Erin, it's not anymore can you afford the mortgage? It's not anymore do you have a 20% down payment? It's the mere fact that because of climate, whether it's hurricanes, fires, floods, tornadoes, everything that you see going on all the time that have destroyed so many houses that you never thought would be destroyed, insurance companies have pulled out of markets. They have gone up, at least in Florida, 100% in premiums. If you make one claim, they will cancel you. And here's the thing, everybody, if you have a mortgage, you have to have insurance for your home. If you don't, you can't get a mortgage. So now we're in a catch 22. Many people can afford a mortgage payment but they can't afford the insurance premium. Now, many of you may know I sold the island. We sold everything. We now live again in Florida in a 2000 square foot condo. What do you think the insurance premium is on this now? Obviously we own it outright, but let's say we were like, everybody where you have a mortgage and everything and you have to keep the insurance. The insurance premium on this is $28,000 a year. Now, most people would say, I can't afford that. I have to sell. Most people would have to sell because now you're looking between that HOA and mortgage, you can't afford it anymore. So here's the bottom line everybody I think because of climate change, I also think because of what's happening with the insurance companies, I think because of the price still of real estate and interest rates not going down. Remember, your mortgage is attached to a ten year Treasury note, not to the fed funds rate, but to treasuries. And right now we're back up again at about 6. 3%. That is not a low interest rate. So when you do all of that, I have to tell you, I don't mind if people rent even more than buy. You have to know that you can afford everything maintenance. And I just have to talk about maintenance for a second. When you have an oil crisis like we're having right now, don't think that doesn't affect everything. It does. It affects what it costs to, you know, fix something, maintenance, all kinds of things because materials go up because we can't ship them. Can we do this? Can we do that? It's more expensive to get it to you. So bottom line is what I'm trying to say here is owning a home everybody, in my opinion, doesn't need to be an American dream anymore. My American dream for all of you is that you live a secure life. Listen, everybody, this isn't to depress you. This is to simply be your financial wake up call, a call that wants you to be in control of your destiny. And you can be, but you have to have faith in who you are.

You have to know what's true and what's not true. And if you look at your finances and you have credit card debt right now and you're only paying the minimum payment due, what lie are you living? If you're not fully funding your Roth IRAs and your employer plans and all of that, why aren't you? What is going on now? I know a lot of you are saying but, Suze, I was laid off, I was this, I was that there isn't an excuse big enough, everybody, out there to keep you from being who you are meant to be. Do you hear me? I could sit here from now until doomsday and talk to you about I want you to do this. that. I want you to do this. But the real question is, what keeps you from doing that what you know you should do with money. And I am telling you, the answer to that is fear. Fear that others will think you don't have money. Fear that you're going to make a mistake. Fear that you won't be able to go on vacation. You have got to squelch your fear so you can feel what it's like to live a fearless life. A life where you are a warrior and you are not going to turn your back on this battlefield. You are going to be in control of your future. Everybody, you can do this. Now, every one of you needs the must have documents. The four must have documents are a will, a living revocable trust, an advance directive and durable power of attorney for health care and a financial power of attorney. Those are them. Why do you need them? And right now I'm just going to concentrate on a will versus a trust. When you have a will, a will is simply a piece of paper, everybody. that says where your assets are to go upon your death. But in my opinion, it does it in the most cost inefficient way possible. And I always use my mama who died at 97, I always use this as an example because, believe it or not, it took me a long time to get her to do a trust. Okay. Mommy has a home. It's in her name, Ann Orman She dies and leaves it to me via a will. And let's just say it's in the state of California, okay? Upon her death, the title is still in her name. I have a piece of paper that says I'm supposed to get the house. I have to take it down to probate court. I'm not going to be doing it. A lawyer is going to do it. In the state of California, you're going to pay a lawyer, executor the whole thing. It's going to take anywhere from 1 or 2 years in probate court and statutory fees in the state of California on, let's just say, a $300,000 home. Could be 20,000 dollars But you say, Suze, what if all I have is a $5,000 down payment on it and the rest is just a mortgage? It's based on the fair market value, not on what you owe or any of that. It's the fair market value, people. So is that what you want to do? But it's not just about a will passing down to your kids. What if you become incapacitated? What if you have a stroke? Who's going to pay your bills for you? Really ladies, you know, actuarily speaking, we live longer than men, so who's going to do that for you? Hey, you just can't do it. A Will just says where your assets are to go. However, if you have a living revocable trust, you are the trustee, You are the trustor. You get to decide everything Held for your benefit while you're alive, your beneficiaries benefit after you have died. Do you know what happens? You take the time while you're alive to transfer the name from, like, my mom Ann Orman into the Living Revocable Trust Just that simple Go to a title company. It's changed, bam. Upon her death because it was held for her benefit while she's alive, my benefit after she has died two weeks later essentially it's mine. No probate, no nothing. But even more important So you don't care about your kids. What I said to you about a will? And how are you going to do something if you have a stroke or are incapacitated? There is an incapacity clause within this program that you designate who can make those decisions for you if you can't make it for yourself, just that simple. If you become incapacitated mommy, Suze could sign for you. Suze could write your checks. Suze could make decisions for you. Just that simple. So what is stopping you, everybody? What? Can you just tell me? It doesn't make any sense whatsoever. Listen to me, everybody. The reason I wrote the Ultimate Retirement Guide for 50+ is that I wanted to designate something for people who were 50 and older. Because here's the truth of the matter. Everything is geared towards really younger people, but most of us right now are older. here's what I want to say to all of you.

You know if you can afford the home you have, you know if you have a really large home right now, and you keep it simply so the kids could come back and visit you once every year or whatever, you know if you have enough money to retire on or not. You know that Social Security may be here or it may not be here. That is unknown. So what can you do that is known? If it were up to me, I would ask all of you to take a good look and decide, should I downsize or not? So I want you to get honest with yourself and really think about downsizing now, cutting your expenses, paying off your mortgage if you're going to stay there, if you know you're going to keep the house forever and it makes sense. But again, I do go into great detail in this in the Ultimate Retirement Guide for 50+. For those of you

who are younger and you are watching, I am telling you now when you're in your 20s or 30s, when you stop thinking about I have to enjoy life now. I have to take a vacation. Now I have to do this. You have one job, and your job now is to save as much money as you possibly can. Max out your Roth 401ks or your Roth IRAs. Stay out of debt. Start dollar cost averaging into these markets. Do not feel like I've got to drive a fancy car. Do you know that most people's car payment now is bigger than my mortgage payment was the first time I bought a home? Are you kidding me? These are your compounding years. And I'm telling you, you will make a mistake. You're 25 years of age right now and you're thinking, oh, I want to have a great time. Do you know if you put $100 a month starting right now, every single month into a Roth IRA, and you did that over the next 40 years ‘til you were 65, with average market returns approximately, let's say, 12%. And by the way, the annual average return over a long period of time is between 10 and 12%. Just so you know, you would have $1 million. Do you know that? But no. You want your Starbucks. You want fancy this fancy that, designer clothes Give me a break. If you just wait ten years until you're 35 to start you think, oh, Suze, what difference can $100 a month make? That's $1,200 a year. In ten years, that's $12,000. Do you know if you start at 35 rather than 25, you would have only $300,000 at the age of 65? What difference did it make? It made $700,000. Why? Because time is the most important ingredient in any financial freedom recipe.

So what is the known? The known is you're going to get older. Hopefully. That's the known really in your mind. What's the unknown? What's going to happen as you get older? Are you prepared for an accident, an illness, a loss of job? How do you prepare? You have at least a 12 month emergency fund. Of funds you need to pay every month if you lose your job. Not going out your rent, your food, your mortgage, things like that. You know, hopefully when you get older, you're going to have to live off of your retirement. So invest in the Roths now so that when you do, it's all tax free because the unknown is the tax brackets. Those are things that you know. Now

a lot of you are saying, but Suze, I'm so confused. Even if you're older, you're confused. You don't know what to invest in. Should I invest in individual stocks? All of you are waiting for me to give you which stocks are my favorite stocks right now, which I do on the podcast by the way, what should I do? An ETF? Do you know even what an ETF is, which is an exchange traded fund? What should I do. When I wrote The Road to Wealth book, which was in 2001, right. That's when it came out. So I wrote it in the year 2000. Do you know there were only about 80 exchange traded funds in all, but only six that were worth their while? Six. Today there are about 5000 exchange traded funds. Today there are more exchange traded funds than stocks that are currently listed on the American stock exchanges the New York, Nasdaq, all of those I want you to think about that, everybody. So the trend right now is really going to exchange traded funds. Why? Because they're focused. You don't have to wonder oh my God. This one stock went down. And now I lost all my money and I don't know what to do. The perfect portfolio would be maybe 50% in an exchange traded fund and maybe 4 or 5 different stocks. They're a little bit more aggressive. But as time goes on, there will be focused exchange traded funds that are managed for you that are something that you probably want to be investing in. So I want you to start being educated on exchange traded funds. The one mistake I don't want you to make in your retirement accounts, everybody, especially in a 401k, I don't want you to blindly go into target date retirement funds. You simply set the date that you think you're going to retire, and that's where you're putting your money. It is a mistake. You don't know that you're actually going to retire on that date, number one, The closer you get to that date, depending on which target date fund you're in, the company that's offering it, they tend to go more and more towards bonds and being conservative than being in the market. You invest according to the economy and what's happening today, not according to your age. So if you continue to do that, you will be making one of the biggest mistakes out there. Again, fear is the main internal obstacle to wealth everybody. And really my main job is to take the fear out of investing for you. Choosing the right retirement account, making sure that your family is protected with a trust and a will and all of that understanding. Real estate, should you do it? Should you not? Is there better ways to invest in real estate? And possibly there is through REITs But which ones? All of that. All that's more than we can do in this very short period of time. But I want to give you a taste. of what's possible, which is why I want you to continue to listen to the Women and Money podcast and everybody smart enough to listen. It is just not for women. It is for everybody smart enough to listen. Also, my YouTube channel, whatever it is, we're still developing things so that you can be the masters of your financial destiny so you can feel secure so you don't have to be afraid. It's all about that, period.