Ask KT and Suze Anything: Why Buying a Condo Can End Up As Your Biggest Nightmare

Summary

Podcast Summary: Suze Orman's Women & Money (And Everyone Smart Enough To Listen) Episode: Ask KT and Suze Anything: Why Buying a Condo Can End Up As Your Biggest Nightmare
Release Date: December 26, 2024
Host/Author: Suze Orman Media

In this engaging episode of Suze Orman's Women & Money podcast, Suze Orman and her co-host KT delve into a variety of listener questions, offering expert financial advice tailored to each unique situation. The episode blends personal anecdotes, financial strategies, and practical tips, ensuring listeners gain comprehensive insights into managing their finances effectively.

---

1. Should I Pay Off My Car Loan or Invest My Maturing CD?

Listener: Sharon
Timestamp: [04:01] - [08:13]

Sharon, a 72-year-old retiree, seeks advice on whether to use her $25,000 maturing Certificate of Deposit (CD) to pay off her car loan or invest the funds. Her current monthly auto payment is $351, and she aims to reduce her expenses to increase her savings.

Suze Orman assesses Sharon's financial situation, noting her total monthly income is $4,965 against expenses of $4,700, leaving a narrow margin of $265. After reviewing Sharon's broader financial portfolio—including a $26,000 money market fund, $40,000 Roth IRA, $70,000 IRA, $19,000 in mutual funds, and $30,000 in bonds—Orman concludes:

“If you took that $7,917 and paid it off, you'd have an additional $351 a month that you wouldn't have to pay. That's like you'd have $616 more per month than what you have in expenses now. You have more cushion and that will make you feel more secure.”
— Suze Orman [06:26]

Advice: Suze recommends using the CD funds to pay off the car loan, emphasizing the enhanced financial security and reduced monthly obligations that result from eliminating the loan.

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2. Navigating the Complexities of Annuities

Listener: Janet
Timestamp: [08:50] - [18:23]

Janet, a 68-year-old retired teacher with a pension, discusses her variable and index-linked deferred annuity, which has grown from $50,000 to $68,300 over six years—a 36.6% increase. She inquires whether to cash out the annuity or transfer the funds through a brokerage firm.

Suze Orman critically evaluates annuities, highlighting their drawbacks:

“An indexed annuity is not a good investment because you only get a percentage of what the index goes up. You do not get the entire thing.”
— Suze Orman [13:33]

Orman explains the tax implications and potential penalties associated with annuities, especially if cashed out before retirement age. She advises Janet to:

“If it were me, I would surrender $9,150 right now before the end of the year, which is half of your gain. That's what I would do. And I would pay taxes on it.”
— Suze Orman [16:19]

Advice: Suze recommends partially cashing out the annuity to minimize tax liabilities and advises against holding onto annuities due to their inherent financial disadvantages.

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3. Understanding FICO Scores for Home Buying

Listener: Theresa
Timestamp: [18:23] - [22:35]

Theresa expresses confusion over the different FICO score models and their relevance when purchasing a home. She mentions various score models (5, 6, 4, 7, 8, 10) and seeks clarity on which is most important.

Suze Orman demystifies the complexities of FICO scores:

“FICO score 8 is the one that's mostly widely used by creditors for general credit decisions.”
— Suze Orman [19:33]

She further explains that different FICO models are utilized by various lenders, particularly mortgage lenders who often rely on models 2, 4, and 5, which are mandated by Fannie Mae and Freddie Mac.

Advice: Suze advises aiming for a FICO score of 760 or above to secure the lowest interest rates and recommends understanding which specific FICO model lenders use during the home-buying process.

---

4. Evaluating Robinhood as a Brokerage Platform

Listener: Marilyn
Timestamp: [22:35] - [23:34]

Marilyn inquires about Suze Orman's opinion on the Robinhood app for buying and selling stocks, referencing past skepticism.

Suze addresses her initial reservations and acknowledges Robinhood's improvements:

“A few years ago I wanted to let you touch them with a ten-foot pole. Seriously. But they have adapted their ways and now I think they are a fine brokerage firm that you absolutely can invest in.”
— Suze Orman [23:10]

Advice: While Suze expresses initial doubts, she recognizes Robinhood's evolution and now considers it a viable option for both investment and speculative stock trading.

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5. Financial Planning After Remarriage and Inheritance

Listener: Susan
Timestamp: [23:34] - [28:01]

Susan, 67, recently remarried her high school sweetheart and plans to sell an inherited house in California, expecting a profit of approximately $700,000. She seeks guidance on maintaining liquidity, ensuring asset safety, and managing investments without jeopardizing her inheritance intended for her children.

Suze Orman emphasizes the importance of maintaining asset separation to protect inheritance plans:

“You are never to put this $700,000 into his name on any level. As joint tenants, you are always to keep it in your name under your separate account.”
— Suze Orman [24:54]

Advice: Suze advises against titling the inherited funds jointly, recommending instead to keep them separate to ensure the inheritance is preserved for Susan's children. She suggests using trusts and trusts' structures to manage joint assets effectively and explores safe investment options like CDs and treasury notes for maintaining liquidity and minimizing risk.

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6. Managing Condo Assessments and Delinquent Owners

Listener: Sandra
Timestamp: [28:01] - [33:40]

Sandra, a 57-year-old Miami condo owner, faces hefty special assessments totaling $42,000 due to building deterioration and a high number of delinquent owners. With $69,000 owed on her condo and only eight years until retirement, she contemplates selling her unit but is concerned about the financial implications and potential liabilities.

Suze Orman provides a comprehensive analysis:

“Given the age of your building, which is 52 years of age, it's more likely that you're going to need a lot of assessments in the future. And so it's very difficult.”
— Suze Orman [29:08]

She outlines the challenges of selling in such conditions, including the necessity to pay assessments before closing and the difficulty in attracting buyers due to the building's financial instability.

Advice: Orman recommends setting a realistic selling price that accounts for the assessments and encourages consulting financial and legal advisors. She also emphasizes the importance of attending HOA meetings to stay informed and explore all available options for managing and mitigating assessment burdens.

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7. Trusts as Beneficiaries for Bank Accounts

Listener: Susanna
Timestamp: [33:40] - [35:34]

Susanna, a 51-year-old single individual with no children, questions whether she needs a secondary beneficiary when her trust is designated as the primary beneficiary for her bank and brokerage accounts.

Suze Orman advises against solely naming the trust as a beneficiary without additional provisions:

“If you die and your beneficiary happens to be the trust, no big deal, you avoided probate, so to speak. However, the problem is, what if you don't die and you're incapacitated and now it's just in your name with the beneficiary being your trust.”
— Suze Orman [35:14]

Advice: Suze recommends changing the title of the accounts to align with the trust's name rather than merely naming the trust as a beneficiary. This ensures that in the event of incapacitation, the successor trustee can manage the accounts without complications.

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Conclusion and Personal Insights

Timestamp: [35:34] - [38:41]

As the episode draws to a close, Suze and KT reflect on personal memories and significant dates, including Boxing Day and the birthday of the late Jimmy Buffett. They share heartfelt anecdotes about influential teachers and express gratitude towards their listeners.

Additionally, Suze reiterates the importance of financial security and invites listeners to explore savings opportunities through Alliant Credit Union's Ultimate Opportunity Savings Account, emphasizing the benefits of consistent saving habits.

“If you are looking for a way to start saving to get the most out of your money, I want you to go to myalliant.com and look into opening an ultimate opportunity savings account. Put in at least $100 a month, every single month for 12 consecutive months, earn 3.10% interest on your money right now and get $100 at the end.”
— Suze Orman [38:04]

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Key Takeaways:

• Financial Security: Prioritizing debt reduction can enhance financial stability, even if potential investment returns are slightly higher.
• Annuity Awareness: Understand the tax implications and potential penalties before investing in or cashing out annuities.
• Credit Scores: Maintain a high FICO score (760+) to secure favorable mortgage rates, and be aware of different FICO models used by lenders.
• Investment Platforms: Evaluate brokerage platforms like Robinhood based on their evolution and current offerings.
• Estate Planning: Keep inherited assets separate to protect them for intended beneficiaries, utilizing trusts effectively.
• Condo Ownership: Be proactive in managing special assessments and understand the challenges of selling properties in financially troubled buildings.
• Trust Management: Align account titles with trusts to ensure smooth management in cases of death or incapacitation.

This episode underscores Suze Orman's commitment to empowering listeners with actionable financial advice, fostering a community where women can navigate their financial journeys with confidence and clarity.

Transcript

[Suze Orman]

Hi, everybody. Suzio here. Now, what is the goal of money? The goal of money is for you to be secure. And there is no better way for you to be secure than having an emergency savings account. It is essential for your financial foundation. So all of you should be participating in the ultimate opportunity savings account at Alliant Credit Union. Go to myalliant.com to find out more. And be secure. All right, Susie.

[Robert]

Kt, are you ready for today's podcast?

[Suze Orman]

Yeah, Robert, of course we're ready, cuz we are unstoppable.

[KT]

Yeah.

[Suze Orman]

Yeah, baby.

[Unknown]

I put my armor on. Show you how strong I am. I put my armor on. I'll show you that I. I'm unstoppable. I'm a bum breaks. I'm.

[KT]

Hi, everybody. Welcome to the Women and Money podcast and ask KT anything, because I know all about Boxing Day. Matter of fact, I know more about boxing day than Ms. Susie, who's sitting in the studio with me right now.

[Suze Orman]

And giving her a look like, what is Boxing Day? I know what Boxing Day is.

[KT]

Boxing Day is one of my. It's my favorite day after Christmas.

[Suze Orman]

And why is that?

[KT]

Because it's when you have all leftovers and you box them up.

[Suze Orman]

You know what? First of all, wait, that is the truth.

[KT]

We hope you had a great Christmas and Hanukkah today.

[Suze Orman]

Kwanzaa. So happy Kwanzaa, everybody.

[KT]

Oh, all three at once.

[Suze Orman]

Yes, Pret. But everybody, before we go on, welcome to the Women in Money podcast as well as everybody smart enough to listen. And this is December 26, 2024. And as Ms. Travis just told you, Boxing Day. It is Boxing Day.

[KT]

Boxing Day.

[Suze Orman]

Now, let me just tell you briefly how I learned about Boxing Day. Do you remember how I learned?

[KT]

Yes, I do. We were in Hong Kong.

[Suze Orman]

Tell everybody.

[KT]

And everybody that was in a helper for all Asian families were all gathered in the square downtown, and they all had boxed lunches. And that was Boxing Day. It's when you have all of the leftovers from Christmas for the next day.

[Suze Orman]

And I was like, what are they all doing, kt? And that's when she told me Boxing Day. So today I have to eat everything out of a box. But that is besides the point. All right, kt, did you have a good Christmas?

[KT]

I did. A very, very. A simple Christmas. It was lovely just being here on the island with very few people colo. And you and I enjoyed it. And his wife arrives today.

[Suze Orman]

Today.

[KT]

And we're very excited to welcome Annie for the very first time.

[Suze Orman]

And he's so nervous I can't even begin to tell you. He is kt. She's looking at me like, oh, don't say that. Cause he listens to these. But, Kolo, you and I know we.

[KT]

Have a big welcome sign in his ap, and he's very, very happy that she's coming finally.

[Suze Orman]

But we hope all of you enjoyed the holidays so far, no matter what tradition you happen to be celebrating. But one thing that always goes on, no matter what, is needing to celebrate your money, your financial affairs. And that's what this podcast is all about. A celebration of you and your money. Kt, what is the first question?

[KT]

Okay, the first question I have. Greetings, Susie and kt. Thank you for always putting a smile on my face. I love your banter. I love KT's sweet voice. And Susie, your laugh is adorable. I have a $25,000 bank CD maturing in February 2025. Here's my question. Should I pay off my car loan to reduce my monthly expenses so I can save a little more? Or what should I do with the $25,000 if you do not recommend I pay off my car loan? I'm 72 years old. My monthly auto payment is $351. The maturity date on that loan is November. Wow. November 2026. And the loan payoff amount is about $8,000.

[Suze Orman]

Does she happen to tell you what her.

[KT]

Her income?

[Suze Orman]

She has Social Security, but what is her income now? Her total amount of income she has?

[KT]

Okay, so the total amount of income she has is $4,965.

[Suze Orman]

Now, tell me, what monthly does it give you the total expenses she has per month?

[KT]

Yes, her expenses per month are about $4,700. Ooh, that's kind of tight, Susie.

[Suze Orman]

All right, so let me answer this then. And this is from Sharon. All right, Sharon.

[KT]

That's tight, isn't it?

[Suze Orman]

All right, so what would you tell her? Is this your quizzy?

[KT]

Well, I don't know. If I wouldn't pay off the car loan, I'd be real careful with that $25,000, because I think she needs some of it.

[Suze Orman]

I don't think so.

[KT]

All right, you're the one that tells everyone what to do. What should Sharon do?

[Suze Orman]

So what I would do if I were you, because if you look further down on this email, KT, she does have $26,000 in a money market fund, 40,000 in a Roth, 70,000 in IRA, 19,000 in mutual funds, and 30,000 in bonds. So this $25,000 is from a CD that she hasn't even listed here. Really? Okay, so what would you have her do knowing she has that money?

[KT]

Probably get rid of that car loan.

[Suze Orman]

You would have her take the seven.

[KT]

It's about 7,000, right?

[Suze Orman]

Yep.

[KT]

All right, so pay that off.

[Suze Orman]

All right, so that will reduce the.

[KT]

Expenses by $350 a month, right?

[Suze Orman]

That's my girl. 51. So that's what you would do?

[KT]

Yeah.

[Suze Orman]

Ding, ding, ding, ding, ding.

[KT]

Good job, kt.

[Suze Orman]

All right, so Sharon, here's what I would tell you. If you did the numbers, just strictly the numbers, you would be financially better off if you did not pay off the car loan with that money and you actually invested it. But KT is looking at me because she knows I just said she was right and you invested it. You would be ahead over the next 23 months by quite a few hundred dollars. However, what is the goal of money, KT Feel secure. Oh, you've got that right.

[KT]

I'm so right on point, as we say on point point on Boxing Day.

[Suze Orman]

I knew you were gonna say that. All right, anyway, and as I look at your expenses, you are only bringing in $265 more a month than you have going out. That is cutting it really close. If you took that $7,917 and paid it off, you'd have an additional $351 a month that you wouldn't have to pay. So that's like you'd have $616 more per month than what you have in expenses now. You have more cushion and that will make you feel more secure. And I just have a feeling when you feel more secure, your expenses will also go down because you won't be spending as much. So if I were you, I would so pay it off. I cannot tell you.

[KT]

My next question is from Janet. Dear KT and Susie, I took out an annuity and then I found you, actually, since listening to your podcast and reading and rereading the ultimate retirement Guide for the past three years, I now have emergency savings and all of my must have documents taken care of. My certified pre owned car will be paid off in February, and I have a plan in place to pay off my home. Thank you for all your advice and expertise. I'm 68 and retired with a pension from teaching. We love teachers, don't we?

[Suze Orman]

Oh, so much.

[KT]

Okay, so Janet's saying, now onto getting rid of my annuity.

[Suze Orman]

Did you have a favorite teacher?

[KT]

I did.

[Suze Orman]

Who?

[KT]

I did.

[Suze Orman]

And why?

[KT]

Bob Waldron. Bob Waldron.

[Suze Orman]

Why was Bob your favorite teacher?

[KT]

He taught history. I Just loved him. Yeah, yeah. And he also loved performing arts. He was a fabulous man. This was in high school, but young high school. He was the one that put on all the school plays and I painted all the scenery for every play and my twin sister was usually the lead. We were very popular, Lynn and I, but I loved him.

[Suze Orman]

All right, just.

[KT]

Ok, ready? Did you.

[Suze Orman]

Actually, I did.

[KT]

Who was your favorite?

[Suze Orman]

Well, there were many from Mrs. Brennan and Mrs. Hazel and Mrs. O'Donnell and Mr. Edwards. However, my favorite teacher was Maura Krichevsky, and she was my Hebrew school teacher. And as a little girl, I never wanted to go to Brownies or be in Girl Scouts. I wanted to go to Hebrew school at a very young age. So every day I would go to regular school and then I'd have to get on a bus and go all the way down to where the synagogue was and they had Hebrew school. And I would be in there for a few hours every day until my mom and dad were off work and they could pick me up because we only had one car. And Mara Kratchevsky. And Mara is Hebrew for teacher. There was something that I just loved about this woman. And every Friday when we would go to synagogue, because I would say, please, let's go. Can you imagine a little kid saying.

[KT]

Can we go to services? No, I can't.

[Suze Orman]

And so we would go and I would ask if I could sit with her. And I would sit with her and she would text her.

[KT]

She loved your teacher.

[Suze Orman]

And she would hold my hand and she would say, you know, Susie, I taught you the Alphabet. And she did. And now that you know the Alphabet, just know that God will put together all the letters for you into words and you'll understand everything.

[KT]

Oh, how beautiful.

[Suze Orman]

Because the service was all in Hebrew. And there was just something about this woman that I loved and gave me a faith, not necessarily in Judaism, but a faith that in. In God. The God for all.

[KT]

Yeah. She inspired you? Inspired me in a big way.

[Suze Orman]

That in my face. Yeah.

[KT]

She's getting all excited, reminiscing.

[Suze Orman]

And I wrote her a letter when I turned 20.

[KT]

You did?

[Suze Orman]

And I told her what she meant to me and I said. And she was older and I said, one day I bet I'm going to grow up and you're going to be proud of who you helped make me. But what's funny is I have no idea she ever saw what happened to me. Anyway, don't get me teary eyed. Come on, what's the next question?

[KT]

All right, this is from Janet. Look at You. You are getting emotional.

[Suze Orman]

I love her so much.

[KT]

You did love your channel.

[Suze Orman]

Doesn't it feel good to love somebody? I mean, really love somebody? Not because you're in a relationship with them or whatever, just love them for what they gave me.

[KT]

So, Janet, be so proud that you are a retired teacher.

[Suze Orman]

Yeah.

[KT]

And I hope you had students.

[Suze Orman]

Look what you started, Janet.

[KT]

You had students like Susie. Like little Susie. So now she says, now, Susie, onto getting rid of my annuity through equitable. I have a variable and index linked deferred annuity contract, series B, that I took out with money my dad left me when he died. In the six years, it went from $50,000 to $68,300. If I figured it correctly, that is a 36.6% rate of growth. The question is, do I have to cash out the annuity or can a brokerage firm have the money transferred for me? Or she's now asking, can you do a Susie School? The teacher wants you to do a Susie school. So how does she can she do that?

[Suze Orman]

You want to know what's funny, kt? I'll tell you what's funny here is that I actually saw this and I wrote Janet and I told her exactly what I thought she should do.

[KT]

Well, tell us what you told Janet.

[Suze Orman]

But before I tell you what I told Janet to do, can I just do a very quick Susie School on why annuities are so bad?

[KT]

Go for it.

[Suze Orman]

All right, so Janet put in $50,000 six years ago. It's now worth $68,300. So in six years it grew $18,300. That happens to be only a 5.4% approximately compounded annual rate of growth, which is horrific.

[KT]

In today's market in the last six.

[Suze Orman]

Years, that is horrific. You, Janet, were in an annuity that was in an indexed annuity that was indexed according to the Standard & Poor's 500 index. This year alone, it's up almost 30%. Are you kidding me? So, number one, an indexed annuity is not a good investment because you only get a percentage of what the index goes up. You do not get the entire thing. That's number one. Number two, Janet, if you decide to surrender this annuity now, then all $18,300 of growth is going to be taxable to you as ordinary income. If you had Simply put that $50,000 in a mutual fund, same thing, Mutual Fund ETF, whatever it may be, and you wanted to cash out now, and it's been six years, that would be taxed to you. As capital gains. Big, big difference. Number two, let's just say you decided to keep that annuity, you died. And now it goes down to your beneficiaries. They are going to owe ordinary income tax on anything above that, $50,000. In this case, $18,300. If you had that in a mutual fund and you died and they inherited it, guess what? That $18,300 would be non taxable to them because they would get a step up in cost basis on it. So do you all start to now understand why I don't like annuities? One thing I also just have to say, KT, if Janet was not 68, let's say she was 57, she's under 59 and a half and she cashed this out, there would be a 10% federal tax penalty on it, number one. Number two is that all annuities in most cases come with a surrender charge. And she could very well still be under a surrender charge of 4, 5, 3%. Whatever it is, if she cashes it out before the surrender period is over.

[KT]

Yeah. What should she do?

[Suze Orman]

So assuming, my dear Janet, as I wrote you, that you did put in $50,000 with money you've already paid taxes on, and assuming that you are no longer in a surrender period for this annuity, if it were me, I would surrender $9,150 right now before the end of the year, which is half of your gain. That's what I would do. And I would pay taxes on it. Now, what's interesting is that all interest or gains are taxed before you get your original money back. January 1st, I would then just surrender the rest of the $59,150, which is totally what's left, you would owe taxes on $9,150 for next year, taxes on that. And that's what I would do. Just that easy. All right, kt, next question. What?

[KT]

I think I'm still spinning on what to do.

[Suze Orman]

No, but let me tell you why I took so much time with that. All people think about when they buy an annuity is what the financial salesperson tell them, which is you can make money tax deferred. You don't have to pay taxes on this until you withdraw the money, blah, blah, blah. If you invest in this and you die and you have less in here, if it's worth less than your original amount, your beneficiaries will get as much as you originally put in. That's how it is sold. What most people don't understand is if you invest in an ETF or a mutual fund or even an individual stock. You don't pay taxes on it until you sell it. So it's tax deferred anyway, but at capital gains rate versus ordinary income tax and on and on. So that's why I went into it so much. Just do me all a favor, can you stay away from them? All right.

[KT]

All right, next question is from Theresa. This is a little, this question really confuses me. It says, what is the best credit score to have when buying a home? 720 or more. And which FICO score is used? I don't understand this. She writes, 5, 6, 4, 7, 8, 10. What does that mean, Susie, if that.

[Suze Orman]

Confused all of you as well. There are many different FICO scores, believe it or not, many reiterations as to how FICO figures what your FICO score is. Again, FICO stands for Fair Isaac Corporation, the company that originally created the score. And most creditors only use a FICO score. They do not use a Vantage score. So any of those scores that maybe you get for free, that isn't what 80% of your creditors actually use if you're buying a home. And I'll just break this down for all of you, you're going to die because here's another long one for you. All right.

[KT]

So you're going to do a FICO Suzy score.

[Suze Orman]

I am. So Fico score 8, 8 is the one that's mostly widely used by creditors for general credit decisions. And that kind of includes whether they're going to give you a credit card or not or a personal loan and sometimes even auto loans. However, it depends on what the specific score is that the lender happens to use. So you should be asking them. But Again, FICO score 8 is the score that is most commonly used for just general credit decisions. And I hope I get this right.

[KT]

It's most popular used by banks, creditors, things like that.

[Suze Orman]

However, FICO score number two, four and five, right, are the ones that are mostly used by mortgage lenders. And these are the classic FICO scores, Katie, that you and I used to talk about years and years ago and are part of the models that are mandated by Fannie Mae and Freddie Mac. Now, let's say you want to get an auto loan. Let's just say you do the auto score. 8 or 9 are the ones that are usually used by auto lenders, just so you know. And if you're really doing a credit application, as I said before, you're sticking with number eight. And that's kind of what you need to know.

[KT]

I think we have to clarify. If I understand it correctly, Susie, these numbers are the numbers of the score system used by creditors, banks, so on and so forth.

[Suze Orman]

And by FICO. Yes. Now, there's two different numbers. There's your actual FICO score, KT.

[KT]

Right.

[Suze Orman]

And FICO scores run anywhere from like 300 up to 800. Eight hundred and fifty. To answer Theresa's question, you want a FICO score of about 760 or above. Doesn't matter. 760 all the way to 850. It'll be the same to get the lowest interest rate. But you need to know that is your FICO score when on the model number two, four or five, which is what is used for mortgages.

[KT]

And I think I just want to say something. The model numbers that are stated here from her asking the question are numbers that are used B2B. They're not. Yes. So we have to explain to each other. Yes.

[Suze Orman]

But you have to know which model to use. She obviously knew about them. So you have to look at your score for that model to know where you really fall.

[KT]

Okay.

[Suze Orman]

That's all. It's really not that complicated.

[KT]

But I don't want people to be confused after teaching them for two decades about their personal FICO score versus a model number used by a creditor or bank.

[Suze Orman]

But do you understand why it matters?

[KT]

Yes, I do.

[Suze Orman]

All right, then they shouldn't be confused if you understand.

[KT]

All right.

[Suze Orman]

Sorry, kg.

[KT]

Okay, are we ready to move on?

[Suze Orman]

I am.

[KT]

All right, so this is. Next question is A Merry Christmas. Hello, Susie and kt. I would like to know how you feel about Robin Hood. Is it good for buying and selling stocks? This is from Marilyn. Tell Marilyn what do you think about Robinhood. I used to call Susie Robinhood.

[Suze Orman]

Why made you stop?

[KT]

Because there's a company called Robinhood. I don't want them to think you're endorsing Robinhood, the company.

[Suze Orman]

Well, I kind of am. Okay, right. In that I like them. A few years ago I want to let you touch them with a ten foot pole. Seriously. But they have adapted their ways of being. And now I think they are a fine brokerage firm that you absolutely can invest in. They've also been a pretty interesting stock investment if you want to speculate as well. Anyway, go on. Kt.

[KT]

Next question from Susan. Hi, Susan. Kt. I've been married to my high school sweetheart for a little over a year now. We are both 67 and so grateful to have found each other again. We are very happy. We both have children from previous marriages. And I have a will and a trust, leaving my assets to my children, as does he now. She said. I'm selling my house in California and will have a profit of about $700,000. This is my only asset, aside from a small Alliant account and a Schwab account. My husband has about $80,000 in an IRA. The house I'm selling is one I inherited from my mother. I would like to keep this money fairly liquid and extremely safe with little risk. I may invest 2 to $300,000 of it in our eventual second home. If we sell his home as well. My plan is that we will both contribute equal amounts to the new home. The rest I would like to put in a combination of Alliance CDs and maybe a Vanguard Voo Voo. I would very much appreciate your advice. She said. It's a little scary, but I know I can trust you and I think I can do this.

[Suze Orman]

So I love that you found her high school sweetheart. But you've only been married for a little over a year now, which really, Susan, is a very, very short period of time. It just is. Regardless of how long ago you knew him. When you sell the house that you have that you inherited and you take 2 or 300,000 of that and put it in a house with your husband, equal amounts. If you happen to put it in title, joint tenancy with right of survivorship, if you were to die, your half automatically goes to him. And if his half or his trust or will says that it's to go to his kids, you have disinherited yours. How you hold title to property overrides the wishes of your trust, your will, his trust, and his will. Understand what I'm saying to you here? Therefore, you are never to put this $700,000 into his name on any level. As joint tenants, you are always to keep it in your name under your separate account. Period. Do you hear me? He could be the greatest guy in the world, but it is your inheritance for your children. His money is his inheritance for his children. So what would I do? If you are going to buy a house with him and you put 2 or 300,000 in it, you each should own it as tenants in common. And you could do that within a trust. And what that means is that on your death, your half goes to your children. Upon his death, it goes to his children. And you could give each other a life estate in that house, which means you get to live in there. But upon that person's death, it gets divided according to where you want your assets to go. So number one, that's what I would be doing if I were you in terms of what should you do with the rest of the money? I don't really know enough about you to really tell you. Obviously, alliant credit union CDs are a great place as well as treasury notes at this period of time, giving a nice interest rate. If you want growth, you might want to wait till Keith Fitzgerald comes out with his thing in a month or so or whenever it does. We're just all patiently waiting. But just go easy with that money and for now just leave it in like an account at either Schwab in their government money market account or something like that. All right, I hope that was clear.

[KT]

Okay, next question is from Sandra. I like this question, Susie.

[Suze Orman]

What, you didn't like the others?

[KT]

No, but I like this one because listen to this. We experience it ourselves. I'm 57 and I live in a 52 year old condo in Miami. We have had several assessments and another one coming up next month for a total of $42,000. In the last few years, I owe $69,000 on my condo. We have many delinquent owners that live in my building to the sum of half a million dollars. I'm considering putting my condo up for sale, but the Realtor is advising me that I will have to pay the assessment in full before the closing. Is that true? I have eight years before I retire. I'm not sure what the right thing to do is sell and go rent or just hold tight. I'm afraid the assessments are not going to end and many unit owners will not be able to pay their part. The rest of us will get stuck picking that up too. I hope you can give me some guidance.

[Suze Orman]

You know, this is another funny one. I answered her directly because this is a really serious situation.

[KT]

It is.

[Suze Orman]

And especially and I laid it out, do 1, 2, 3, 4, 5 things you need to know. And with that said, everybody, if you want and you have a question, just write into asksusie s u z e podcastmail.com if KT chooses it, it will be on the podcast. But I go through these questions every once in a while and if I see one that catches my attention, that needs truly an answer right away, I answer it most of the time. Not all the time, but most of the time. It just depends how many has come in. So this one was Sandra. And the truth of the matter is just to summarize it, that these things that are happening, especially in condos in Miami, in Florida that are older than 20 years of age, they are getting a assessments. They're deteriorating. And because of that collapse of that condo where many people were killed, now the Miami laws are making it so that you have to bring the condo up to date. And given that they've all let it go for so long, these assessments are not little. Some are $100,000, some are $200,000 or more. And a lot of people are just moving out. They don't care. They think they're just going to absolutely, absolutely walk away from it, which is why so many people are in arrears in the building. So, first of all, Sandra's realtor is absolutely correct. If you were able to sell it, Sandra, you would have to pay the special assessment before closing. But the fact that this is happening, many buyers are very reluctant to buy something that has existing special assessments on it. Also, this is going to be a very difficult sell for you because you almost have to disclose to the new buyer that there are a high number of delinquent owners in your building. And when they realize that, it can make your unit more difficult to sell, and especially it could impact the sale price. And I could go on and on and on. Given the age of your building, which is 52 years of age, it's more likely that you're going to need a lot of assessments in the future. And so it's very difficult. What should you do? If you really want out, then you're going to have to put, in my opinion, a price on this condo that somebody will go, I'll chance this. Oh, it's worth. Let's just say it's worth 300,000. And she only wants. Sandra wants 150,000 for it, and she's paid for the assessment. I'll take it. But you're going to have to make an offer that is so enticing to somebody, I can't even tell you otherwise. Chances are you're going to be stuck right there. Right. And remember, continued assessments and a high delinquency rate is going to continue to negatively impact your property's value over time. So these are all the things you have to think about. But you should consult a financial advisor, you know. Absolutely. Make sure you attend the HOA meetings to find out what do they have planned, how are they going to help you? And consider also legal advice, because maybe a condo lawyer can help you understand your rights and the association's options for dealing with delinquent owners. And I can go on and on, but that's approximately what you have to do. The reason that I liked that you picked this one, Katie, is this isn't just affecting Sandra. It might affect us in the condo that we live in. Like, we've been in there a number of years. It's going on 25 years of age, and I've been told that work needs to be done on it. Now, in our situation, thankfully, nobody's in arrears. And it's a wealthy enough building, really, that people have the money to pay the assessments. But don't just think that buying a condo in Florida is the key to making money in Florida real estate. It may become your greatest nightmare yet.

[KT]

All right, Susie, this next question for you is from Susanna says this is.

[Suze Orman]

Our last one, right?

[KT]

Yeah.

[Suze Orman]

And because I went so long and you already did your quizzy up front, we don't have a quizzy for you today.

[KT]

Okay, well, this is a good one. Hello, Susie and Katie. I'm 51, single, no kids, is having my trust as a beneficiary to my bank brokerage accounts instead of opening new accounts under my trust name. Okay. If having my trust as the primary beneficiary, do I need a secondary beneficiary?

[Suze Orman]

And the answer to that question, Susanna, is no, no, no. Go to the trouble of changing your accounts to the title of the trust. Why is that? Because, all right, if you die and your beneficiary happens to be the trust, no big deal, you avoided probate, so to speak. Maybe, maybe not. Depends how you did everything. However, the problem is, what if you don't die and you're incapacitated and now it's just in your name with the beneficiary being your trust? Remember, one of the goals of having a living trust is that in case of an incapacity, your successor trustee can step in and pay your bills, do all kinds of things for you. So, no, it is not okay to have the beneficiary just be the trust. You are to open it up in your trust name, change the title. All right, kt, what do you think?

[KT]

Boxing Day.

[Suze Orman]

Boxing Day. What's in my box today?

[KT]

Let's go get. Let's have some goodies in the box.

[Suze Orman]

No. What's in the box?

[KT]

What's our leftovers?

[Suze Orman]

What's my leftovers?

[KT]

Well, we have. We have a lot of leftovers.

[Suze Orman]

It will surprise me.

[KT]

I'm gonna surprise.

[Suze Orman]

But here's the thing, everybody.

[KT]

No sweets for you.

[Suze Orman]

But before we go on, today is December 26th. And yesterday, December 25th was Jimmy Buffett's 78th birthday.

[KT]

Yeah, Jimmy, we miss you. We miss you so much.

[Suze Orman]

So, so much. I can't even tell you. And we've been playing Melikalikimaka all your songs. We played it all day yesterday for your birthday. But wherever you are, my dear Jimmy, please know that these two little mermaids of yours miss you so very, very much.

[KT]

So, Susie, we still have one more podcast in 2024. That's Sunday. Maybe I'm going to come on with you.

[Suze Orman]

Maybe I'm going to take the day off.

[KT]

No, maybe I do it with you.

[Suze Orman]

Maybe I'm going to take the day off.

[KT]

Don't take the day off.

[Suze Orman]

Maybe we need to give Robert a day off.

[KT]

No, we need a year end.

[Suze Orman]

Oh, we do.

[KT]

We need a year end. We need a summary. Robert, why don't you do our year end? Funny one.

[Suze Orman]

Yeah, Robert, what's wrong with you?

[KT]

Wait, let Robert do it. Year in Sunday. Susie, School. That isn't a school at all. It's Sunday. Fun with Susie. A year in.

[Suze Orman]

Well, let's see what he can do. All right. But until either then or next year or whatever, we always wish you a very happy new Year. We'll do it again in just a few more days, but just in case, happy New Year. We love you all very much. And kt, do you want to announce anything?

[KT]

Well, it's not an announcement. We owe a big thank you at this year end to our friend Sia, who's made us all so happy and made us what, Susie?

[Unknown]

Unstoppable I'm unstoppable I'm a boss with no breaks I'm invincible I wonder Single day mine's all powerful I don't need batteries to play I'm so confident yeah I'm unstoppable today Unstoppable today Unstoppable today Unstoppable today I'm unstoppable today.

[Suze Orman]

Hi, everybody. Suzy O here. Now, if you are looking for a way to start saving to get the most out of your money, I want you to go to myalliant.com, that's M Y A L L I A N T dot com and look into opening an ultimate opportunity savings account. Put in at least $100 a month, every single month for 12 consecutive months, earn 3.10% interest on your money right now and get $100 at the end. Are you kidding me? It's the best deal out there. Start saving right now.

[Robert]

Neither Suze Orman Media nor Susie Orman is acting as a certified financial planner advisor, a certified financial analyst an economist, cpa, accountant, or lawyer. Neither Suze Orman Media nor Suze Orman make any recommendations as to any specific securities or investments. All content contained in this podcast is for informational and general purposes only and does not constitute financial accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Neither Suze Orman Media nor Suze Orman accepts any responsibility for any losses which may arise from accessing or reliance on information in this podcast and to the fullest extent permitted by law, we exclude all liability for loss damages, direct or indirect, arising from the use of this information. The must have documents discussed in this podcast are legal documents created by a lawyer and distributed by Hay House.