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Just go to LinkedIn.com somoney that's LinkedIn.com somoney. Terms and conditions apply. Sew Money Episode 1887 Ask Farnoosh. You're listening to so Money with award winning money guru Farnoosh Torabi. Each day get a 30 minute dose of financial inspiration from the world' business minds, authors, influencers and from Farnoosh yourselves. Looking for ways to save on gas or double your double coupons. Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life. Welcome to so Money. Welcome to Sew Money everybody, I'm Farnoosh Tarabi. It is Friday, October 3rd, and it's Ask Farnoosh time. We're going to unpack your money questions as well as some of the biggest money stories from the week and what they can potentially mean for our financial lives. You know, this government, government shutdown has put a pause on a lot of things, including the monthly jobs report, and it's leaving a lot of economists and the markets in the dark. We also want to talk about Fannie Mae and some predictions there that might be, I think, good news ultimately for borrowers. And our president is looking into the online pharmacy business because why not? Plus, should I open a bank account overseas? Farnooch, that tops our questions this week. I spent a lot of time breaking that down. And you'll be surprised with what I probably have to say with so much uncertainty here at home. This is a question that I think a lot of us are thinking about and maybe quietly asking our spouses, our financial advisors. And now we're going to talk about loudly on the show. But first, let's talk about the news. Did you hear that the Labor Department did not release its monthly jobs report? This is the first time in more than 40 years. This is, of course, due to the government shutdown that is already showing ripple effects on the economy. Economists and investors rely on this data to understand the health of the labor market as well as inflation trends and what maybe the Fed will do next. So without it, the markets have been flying a little bit blind all day, although, I don't know, is the Dow up 500 points? Blind ignorance is bliss, I guess. For what it's worth, economists were not expecting this report to show a rosy figure of any large amount of jobs added in the month of September. We shall see. Meanwhile, in housing news, Fannie Mae is predicting a major shift in mortgage rates. I'm talking now to my potential home buyers in the audience. Fannie Mae expects rates which have been stubbornly high and have kept many on the sidelines to start easing next year. And if that forecast holds true, well, maybe that would mean that some millions of homeowners would finally be able to purchase that home. I know a lot of us are also locked in our mortgages. We don't want to sell because where would we go with a 2 1/2% mortgage rate? We're looking at, you know, at best right now, maybe 6%. And that is unfeasible for many of us. And that's putting pressure on the markets. Right? Less inventory means higher prices. And then Finally, I was reading that President Trump has entered the prescription drug space. What else is left? Right? He has plans to launch an online pharmacy. This is in the New York Times. They announced this deal with Pfizer and the goal is to lower Medicaid prices and help consumers buy drugs directly from manufacturers. The goal is to save money for Americans who are struggling right now with prescription drug costs. I'll put those links for those articles in our show Notes. In case you missed our episodes this week, go back and take a listen. On Monday, we heard from Katie Gaddy Tassen, who is the author of Rich Girl Nation. She's also got a podcast called Money With Katie. Her book, Rich Girl Nation is not your average money guide. Init, Katie weaves sharp analysis, real world context and her signature humor into a manifesto for financial independence, especially for women. And then on Wednesday, why is negotiating different for women than men? I don't love it, but this is the world that we live in. And if you're a woman going in to negotiate a salary like your male friend at work, you're probably not going to get the money. Katherine Ballantine was our guest. She's the CEO of Worth More Strategies and she came with a lot of research backed advice and tools and scripts to help us all negotiate better smarter, whether we're looking to get a raise, a promotion, or even more flexibility at work. Thanks to everybody who came out for my SO Money Investing workshop earlier this week. We talked about simple ways to invest for retirement, for college, savings, for a goal that's in the future with a big question mark on it. But you know you want to have money for that in the next five to 10 years, how to open up an account, what to invest in, what I invest in mistakes I've made. I do this workshop at least once a year and I think I'm going to do it again in the new year. So stay tuned. In the meantime, if you want to get access to my investing workshop, along with all of the workshops that I've done this year for our so Money private club members, you can go to somoneymembers.com and sign up. This month we're actually gonna be talking about how to negotiate a raise, how to master the art of salary negotiations. We'll talk about some of the ways I've done it and how the experts tell us we should do it. And I'll also leave room to answer your questions directly live on that webinar, somoneymembers.com all right, let's hit the Mailbag. First up, a question from our friend in the audience who follows me on Instagram as well. You can follow me there at Farnoochtarabi. Maddie reaches out and she says, hey, Farnoosh, question for you. I hate to admit this fear of having my money in the bank is growing. Is this a crazy thing with everything going on? If we say the wrong thing or like the wrong post, et cetera, it feels like I would have absolutely zero power over my money since I am not, quote unquote, one of them. Also known as a Latina immigrant who became a naturalized citizen. Are you hearing of this fear? Is it normal? I have built up so much wealth and I'm a bit nervous of it being tied up in American bank accounts. What are your suggestions on banking outside the us? Love your podcast. Well, firstly, you're not alone. I have heard of these fears. We're living in weird times and I feel for my friends who are immigrants. It's very, very upsetting, believe it or not. And this is the first time I've said this kind of out loud to people on the podcast. But a couple of weeks ago I was talking to a friend who works in, let's just say, technology, okay. And she's a woman. And she said, I've been starting to slowly put my money in overseas bank accounts. Not all of it, but just enough in case I get deported or I have to leave for some reason that I have a financial backup plan in another country. And it really kind of surprised me, but I guess shouldn't surprise me. And so yeah, late at night I have been googling more things like how to open up a foreign bank account. Can you do this? And so to answer your question, if this is something that you want to do, I've done a little research and one option is you can open up a bank outside of the US either in a country where you live or in a jurisdiction that allows offshore accounts or non resident accounts. HSBC Expat is one bank that offers accounts in multiple currencies for non residents and expats like the Euro. The Pound Barclays International bank account gives clients the option to hold funds in pounds euros. Some jurisdictions are more friendly to Americans than others. So just you have to do your research. Like some countries have more red tape than others. And I'm not saying here that we need to all leave the US banking system, but if again, healthy state of panic. If you know thyself and you are like, given my profile in this country, I am no longer as safe as I was A year ago or two years ago. If it's feasible for you to take some of your savings and park it somewhere that you think because you've done the research is safe for you, that will be there for you in the event that you do have to pack up your bags and leave, that you're worried that your bank account here will get shut down, that you're, the banking system here will shut down. I always say, like, if the banking system shuts down for everybody, like, we have bigger problems, okay? There are zombies in the street and the last thing you're worried about is how to pay my mortgage, right? You're like building forts. I can't believe we're talking about this on a financial podcast, but here we are, guys, 2025. Welcome. Take a seat. Now, things to be really careful about. There are some legal issues that everybody needs to know about if they do want to start opening up bank accounts outside of these borders. It's not going to be easy. First of all, because even though I just ratted off a couple of banks, many foreign banks will exclude Americans due to their regulatory issues. So you'll need to find ones that explicitly accept US savers. And then you are still required to report your foreign bank accounts. Just so you know, we're not encouraging, you know, secret offshore accounts, even holding small accounts may require some obligations with the irs. So just FYI. And then also there's currency risks and fee risks. You know, holding funds abroad may not come for free, right? You have to pay the exchange rate. You have to potentially pay foreign transaction costs. And this is a big one. A lot of foreign banks do not offer insurance like FDIC protections. And this is where I just, you know, go back to my daily operations. After all my midnight Google searches. I'm like, oh, but I have FDIC insurance. And so if the banking system fails. I know this question is not about the banking system failing. This question is from our friend in the audience is more about like, what if I get profiled and I am forced to leave this country or whatever, or my banking gets shut down because I am deemed an enemy of the state or whatever, right? That, that point, FDIC insurance doesn't even matter for this person, sadly. But for everybody else who's just has a distrust of the US banking system operating at normal speed, rest ass. There is FDIC insurance which protects your accounts up to a total of $250,000 per account holder. So long list of things to keep in mind. It's not as simple as going online right now and opening up a bank account in British Pounds. It's sad that this is where our minds are going, but at the same time I can understand it and I can respect it. I know about fear and if you want to turn that fear into a healthy action, start looking at your options. Talk to your financial advisor. Actually, you know that this person is supposed to be your fiduciary. If they're a cfp, they need to give you advice that's in your best interest and maybe with their help you can look at alternative bank accounts that where in the event that you have to leave this country, you have money somewhere else. Hi, I'm Adam Grant, host of the podcast Work Life. 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Okay, give it a try@mintmobile.com Switch upfront payment of $45 for three month plan $15 per month equivalent required New customer offer first three months only, then full price plan options available, taxes and fees extra C Question from our friend in the audience, Jane, regarding her dad. Her dad is 68 years old. She says unfortunately he mismanaged his money a lot, has been and out of work for years and has no retirement but does collect Social Security. He's currently not working and I don't think he will again due to health reasons. He is quite minimalistic and is able to survive off of Social Security and dips into a little bit of savings each month. Thankfully, he has savings from an inheritance from a family member who passed a few years ago. I have been encouraging him to invest or do something with that money, but unfortunately it's been sitting in a regular bank account for several years, earning little to no interest. He's very stubborn. My dad has about $100,000 left. He's finally allowing me to help him set up a high yield savings account and come up with a plan for investing part of his savings to hopefully help sustain the rest of his retired years. My to you is how do you advise splitting up that money between regular savings, high yield savings, mutual funds, et cetera? I'm very concerned about his financial future and I'm trying to help set him up the best I can with what he has. Wow. Jane, your dad is really fortunate to have you looking out for him and I'm very honored that you came to me with this question. I take it very seriously. So I'm going to help you. I'm going to help you break this down so we can come up with a workable plan that balances strikes a balance between your dad's immediate needs today with some opportunities to grow and maintain his savings for the future. He's 68 years old. We hope he'll live another 30 years. The first priority, I would say is to make sure that dad has a safety net accessible cash to cover his everyday needs and any unexpected expenses. Social Security thankfully is covering his basics, but if he's dipping into savings each month, that suggests that it's not quite enough, right? It's important to have a healthy savings account. So firstly, does he have six to 12 months of his living expenses tucked away somewhere? Like maybe taking whatever the Social Security monthly stipend is, multiplying that by 6 to 12 and then just taking that from the hundred grand and putting it aside somewhere? A high yield savings account is perfect for this because it's going to stay liquid. And he can use this for anything that comes up unexpectedly, like a surprise medical bill or some kind of household emergency. In addition to the high yield savings account, I think having that plain vanilla savings account is still useful. That nothing percent savings account is still useful because you can connect that probably at the same bank to the checking account and in there just put enough for like two months, a month and a half's worth of expenses. In case some months there's fluctuation, you want to make sure there's coverage. If he's going to go over what he has in the checking account one month, the savings account can be a safety net essentially for the checking account. The next step is to invest for growth. As you say Your dad is 68, let's be real. I wouldn't give him the same investment strategy, right, that someone who's 38 or even 48, he doesn't need to invest aggressively at this age. But I think he can put some of his money to work via low risk investments. So maybe taking a remainder of what's not going in the HYSA and putting a portion of that into low risk income generating investments including treasury bonds and bond funds. Treasury bonds or bond funds. Treasury bonds you can buy directly through the treasury website@treasurydirect.gov Treasury bonds are issued again through the government. They're backed by the full faith and credit of the US Government. There's guaranteed payment, which gives him predictable income. It's also pretty liquid. Treasuries are generally the most liquid types of fixed income investments. So if there is something that he needs to cover relatively soon and quickly, he can tap it. And there are tax breaks. So it's not exempt from federal taxes. But treasury bonds, the interest on Treasuries is exempt from both state and local taxes. There are some risks like interest rate risk, there's inflation risk, there's market risks, of course, but relative to stocks, a much more predictable investment. And then bond funds. I would go for high quality bond mutual funds or ETFs. Vanguard Total Bond Market Index Fund is one example. It could be a good option for where you want maybe a modest yield, not a lot of volatility. That's where I would put probably 40 to 50% of the remaining funds. You could do another 20% in the stock market, a diversified mix of stock funds or ETFs. Again here you want to choose low fee investments. And if you've been listening to this podcast or if you've joined any of my investing workshops over the last year. You know, I love a good low fee index fund. You can grab them at robo advisories anywhere from a Charles Schwab to Betterment. There's a lot of different automated investment platforms out there where you can open up a portfolio. Choose your, choose your investments or have them pick your investments based on your dad's age, his risk tolerance and his goals. They will probably do a similar breakdown where it's mostly going to be bonds, some stocks, and then probably the rest in cash. So to recap, build that emergency fund for your dad. Take whatever his Social Security monthly stipend is, that amount, multiply by 6 to 12, whatever is workable, doable, and then just park that in a high yield savings account from that hundred thousand dollars with the rest of the funds. You're going to invest the money mostly in bonds, some stocks, and then the rest may be still in cash. I'm okay with putting some money in a nothing percent savings account if it's useful to help cover the bills that are coming due every single week, every single month in to whatever he's getting from Social Security. You want to have some liquid cash to be able to pay bills on a regular basis. You mentioned that your dad is dipping into savings, so putting aside some of the cash for those monthly expenses, maybe a month's worth of expenses in a savings account is a wise way to go. All right, thank you so much. Let me know how it works out. All right. Julie has a question. She says I am divorced after a 26 year marriage in which my husband was the breadwinner. He made a substantial amount of money annually, typically 300 to $600,000 during these years. I'm facing a head versus heart dilemma, says Julie. My serious and great boyfriend of two years has asked me to marry him. The timing was a surprise earlier than I expected and we haven't had in depth financial conversations yet. He's not aware of the Social Security benefit money that I would stand to lose. The practical side of me is screaming, screaming no, do not give up the Social Security benefits that you'll be eligible to collect. And my heart is saying if you want this legal union, get married. The rule is that once you get married, you're no longer eligible to collect benefits from your ex. I guess the advice I'm asking for newsh is how do I explain to someone that I love that it might not be financially wise to get married? All right, Julie, so it sounds like you have made up your mind that you want to go with more of your practical side. And I am with you on this. It's not romantic. And some people, depending on their idea of marriage, would not be on board with this or would have a hard time understanding this position. But this is a very specific situation. This isn't me saying everybody who's entering a second marriage, don't go for the marriage because you might miss out on some Social Security benefits. But in your case, Julie, and I'll outline the reasons why I'm with you on this, and then I'll get into sort of how to break this to your partner. But one, you were married for 26 years, okay? And I imagine you might have gotten married even if you got married, like, at 25. You're in your early 50s now, and retirement is not, you know, 30 years away. It's. It's not far away. And this may have been money that you are really counting on. You invested a lot of your years in that marriage, and you, as you explained, your husband made substantial income. So I. I am guessing that these Social Security payments will be very helpful to you. And you are probably, you know, to some extent, counting on that. Marriage is not always financially beneficial. And in this case, there is this con. There is this trade off of getting remarried. And as a result of this not being able to collect on your ex's Social Security, if you were getting remarried in your 20s, in your 30s, and, you know, you had a long new marriage ahead of you, and you were working and your husband's working, and there's the opportunity to sort of out earn what your initial spouse's Social Security would have benefited you, I'd say, you know, this is not an issue to worry about. Get married. You'll probably end up making enough money between the two of you and having a good Social Security benefit down the road. But in this case, you said 26 years, and he made a lot of money. So this is. This is not a little bit of money that we're talking about. And the way that I think you want to present this to your partner, your new partner, is just the same way that you came in Utah, told me about it, with complete honesty and transparency. You've not talked about money really yet with your partner, so get on that. And I don't know if you've said yes to this proposal, if you've said, hold on, let me talk to Farnouche, but I think it would behoove the both of you before you get engaged and start making wedding plans, if even that's where you're headed to talk about your finances. And I don't know if your partner is coming to the marriage or to this relationship with an ex of his own children. If there is a situation where you're blending families, this really requires a conversation, many conversations. And I would even consider working with a financial advisor to help the two of you figure out how to create various accounts so that you're protected. He's protected. You can still have maybe a joint account, by the way, you can do all of this without getting married. I've written about how partners. Because these days, you know, people don't want to get married. They want to be with somebody for the foreseeable future. They want to be in committed relationships. But the idea of marriage doesn't really sit well with them for various reasons. So you still want to protect yourself, you want to protect the union. And you can create your own contracts that are what I call these, like, no nuptials, you know, where you're not actually creating a prenuptial because there's no marriage, but you can create a contract that outlines what would happen in the event of a breakup, what should happen during the relationship, as far as who pays for what, and kind of getting all of that written out, drafted so that the two of you can use it as a reference point throughout the relationship in case one of you forgets or there's any miscommunication. Is it the most romantic thing? No. But I'll never forget when Erin Lowry, who's the author of Broke Millennial, and she's written many books in that series, one of them about how to have, you know, sticky conversations about money with your loved one. So maybe you want to check out her book. But I remember she came on the show back in January, I think it was, and she said, we often forget that marriage is a huge contract. You're entering into a partnership, and you sign a legal document, you get a marriage license. This is not just, you know, saying your vows in front of your loved ones. It is a major piece of paper that you sign, and it has many, many implications that we often don't know about until. Until it's too late. So take a breath. I'm happy for you that you are in this new relationship and it's going so well, and to continue having it go so well, you want to talk about money and be transparent and tell him how much money this is, you know, and how this money could support you, potentially support the both of you at some point. If he loves you and he understands, hopefully he will see how the two of you can continue to be in a committed relationship without this legal piece of paper. You can still have a union ceremony, but getting married legally will, as you know, disqualify you from getting this Social Security payment from your ex. I like to think of myself as a romantic, but I also think in this case, the practical the financial end of this scenario supersedes the romantic notion of, you know, getting married and getting that marriage license. You can still have a happy life together. Many people are without that piece of paper. And then as a result of that, you being more financially well off. All right, that is our show, everybody. Thanks for tuning in. As a reminder, you can always send me your questions by going to somoneypodcast.com clicking on Ask Furnouche and typing in your question there. You can also DM me on Instagram at Farnooch Tarabi. I'll see you back here on Monday. And I hope your weekend is so money. Morning Zoe. Got donuts. Jeff Bridges why are you still living above our garage? Well, I dig the mattress and I want to be in a T mobile commercial like you teach me. Soldana oh no, I'm not really prepared. I couldn't possibly at T Mob we'll get the new iPhone 17 Pro on them. 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