A (0:00)

Kt. I'm so happy because people are finally starting to understand the difference between identity theft protection and scam protection. I know it's an epidemic.

B (0:10)

The scammers are stealing money online.

A (0:14)

My money, your money, everyone's money. Only if you make a mistake to protect yourself. Everybody go to Suzeorman.com and check out the ultimate scam protection. I promise you, you won't be sorry that you did. Foreign. 20:26 welcome everybody to the Women and Money podcast. And everybody smart enough to listen. Susie O here and today is Susie School. But before we begin, obviously take out your little notebook, Susie Notebooks. And I just want to say thank you to the almost 85,000 people that signed up to take the webinar last Thursday. And just now, all of you will be automatically signed up in the second part, which will be the end of May, the first week or so in June. I don't know exactly when yet. It will be with fitc and it is a webinar. I am telling you, it's just going to be the two of us this time that you do not want to miss out on. That's all I'm going to say to you. And there you go. But one of the topics that we will be talking about on that webinar are exchange traded funds. And the other day I was talking to my really good friend, this brilliant lawyer and I was talking to her and I mentioned about an etf. She said, what's an etf? I said, what are you talking about? She said, what's an etf? I said an ETF is an exchange traded fund. And she said, I have no idea what that is. And I'm like, oh, that's interesting. And then I realized that it's possible that many of you don't know what an exchange traded fund is. And it's also something that all of you need to to know what it is and why as time goes on here, investing goes on, it may be the answer to your investment concerns. You know, when I first started writing books, my first book came out in 1995 called you've earned it, don't lose it. Do you know that they had maybe one or two exchange traded funds back then? By 2001, many years later, for my third book, there are only about 80 exchange traded funds. And really if you look through that book, I think I only talk about six of them. And nobody knew at all back then what I was talking about. All anybody knew was a mutual fund. A mutual fund. I put my money in mutual funds. My 401 s have mutual funds, Susie. I buy the Vanguard mutual fund. I buy this, I buy that. And I would say, no, no, I want you to buy exchange traded funds instead. And they would say why? And then I would have to educate them on why. Do you know that there are more exchange traded funds traded on the stock market today than there are individual stocks? And so many of you have such a hard time when to buy, when to sell, what to buy, what to sell when it comes to individual stocks. So it may be one day, believe it or not, that a lot of people will just be buying exchange traded funds to solve their investment problems or their dilemmas because they don't know what to do than individual stocks. But it dawned on me that I would imagine most of you don't even have a clue as to when did exchange traded funds come about. Why did they even bother creating exchange traded funds? And why, Susie Orman, do you like exchange traded funds better than mutual funds? So the whole story about exchange traded funds started, believe it or not, on October 19, 1987. Now, many of you may remember that day. Honestly, I will never forget that day as long as I live. That day is known as Black Monday. Why? Because the Dow Jones industrial average dropped 508 points on that day. Now you may not think that's so bad. 508 points, Susie, there are days when the Dow Jones drops a thousand. What are you talking about? Why is that so bad? Well, at the time, you have to remember, the Dow wasn't as high as it is right now. That was a 22% drop in just one single session. Everybody. And you know that that remains the largest one day percentage decline in the US Market history. So imagine living through that. Imagine. What am I going to tell my clients? What am I going to do? Oh my God. God. Anyway, it was because of that day that exchange traded funds came about. And the reason is this. After that happened, I have to tell you, nobody knew what to do. And the securities and Exchange Commission, they were freaked. And they actually wrote a 840 page like postmortem of the aftermath of the October 1987 debacle. Now, somewhere in those 840 pages there's somebody, and I don't know who did this. They made a suggestion that if investors could trade baskets of stock as a single security, that the market might be less prone to these downfalls again and these panics. And it was in this thing they wrote. But truthfully, nobody ever thought anybody would take that seriously. Except one man. One man read this thing and took it very seriously. And his name was Nathan Most. And I remember when I first learned about him, I went, oh, he's making the most out of money. But he was born, I think in 1914, right around there. He died, by the way, in 2004. But he really wasn't your typical innovator or these people that you read about today that are inventing all these things. He had worked as a Navy physicist during World War II, and then after that he spent decades in international commodities trading. And he would trade vegetable oils and agricultural goods and anything that moved through warehouses. But in 1977, he joined the American Stock Exchange, known as the Amex, as head of new product development. Now, I want you to put a pin in that for one second. The story I'm about to tell you is how change happens. And there are people today that are a lot like Nathan Most, that they're creating things that will change how everything is done. So just keep that in mind. So in 1988, Mose was about, I think, 74 years of age and he was on the AMIC Stock Exchange, as I just said to you. But that exchange was what, struggling. So he didn't really know what he should do. And he joined forces with a man by the name of Steven Bloom, who had just graduated Harvard with a Ph.D. and they kind of saw an opening. And here's what happened. Most realized that in the commodities world, everybody, you don't move the actual barrel of oil, oils or sacks of grain every time ownership changes hands. Instead, the goods in a warehouse and investors trade what was called warehouse receipts that represent ownership of the underlying stuff. Now he thought, what if you could do the same thing with stocks? A warehouse holding hundreds of stocks with receipts that trade like a single share. Now think about that. That was quite something. So what did he do? He went and he pitched the idea to John Bogle. Now, do you all know who John Bogle is? You should, because John was the founder of Vanguard and really the father of the index fund. So at first Bogle said, are you kidding me? He said no, because he worried that a tradable fund would encourage short term speculation, which is the opposite of the buy and hold philosophy that John Bogle had built his entire empire on. However, Most and Bloom did not give up. They kept working on this. They filed a proposal with the SEC in 1989. They had a lawyer by the name of Kathleen Moriarty. Obviously it would take a woman. And they kept working on it and working on it and working on, took all the way to January of 1993 for it to hit. So on January 22, 1993, the very first S&P 500 Trust came about. The spider symbol Spy, which by the way, many of you still have it to this day. And by the way, obviously John Bogle absolutely entered the exchange traded fund market as time went on. Now just to give you an example, when it first launched the Spider, the SPY traded about a million shares that first day. Not a blockbuster, but okay. But by mid 1993, daily volume had shrunk to only 18,000 shares. And by 1995 assets had actually declined from 461 million to about 419 million. Because spiders didn't pay any commissions, brokers didn't have any incentive to push them and in fact many people just dismissed it as a quirk. So I want you to think about what I just told you. Because financial advisors could not make money off of selling you ETFs. These spiders, they didn't recommend them. They wanted to instead sell you loaded mutual funds. Mutual funds that they could get a 4, 5, 6% load on, which is a commission. But they seriously steered investors away from ETFs and into mutual funds. So back in the 1990s, it was the beginning of ETFs. By 2010, everybody exchange traded funds absolutely exploded. And do you know that today, on most trading days, the single most heavily traded security on any US exchange is not a stock at all. It's SPY, the ETF for the Standard and Poor's 500 index that a 74 year old commodities trader dreamed up from a warehouse receipt. Analogy. Now I find that fascinating, but you want to know what I find more fascinating? How much money do you think the inventor of ETFs, the creator of how most people invest today, how much money do you think he made? Or Bloom made? Or Moriarty, how much do you think they made? Everybody. They never made $0.01 in royalties. Now he earned a salary obviously from the Amex and he later served on the board of the Ishares Trust, which does ETFs or did while he was alive, he made absolutely nothing. Now there's something about that that I love as well. Because this man did not create ETFs for him to get rich. He didn't create the things that many of the things that are being created today are being created for the inventors of them to get rich, AI whatever it may be. And there are so many people getting so incredibly rich today on the things that they are inventing. But the man who Created the way that most of you invest today and will be investing never made a cent. Don't you find that fascinating? I do. Now I'm going to spend a little time here on why I like exchange traded funds and why I like them better than mutual funds. Because these are things that I want you to know so that you are prepared for the webinar. Part 2 When you buy a mutual fund, and listen to me closely now, when you buy a mutual fund and a mutual fund is simply a pool of money where you put money in with a whole lot of other investors that put money in and that money buys a whole bunch of stocks and you own a little sliver of each and every one of those stocks, however, because it's a mutual fund, and how the prices of those stocks are calculated to give you the price of what the mutual fund should be. And that's called the net asset value. What is the net value of all the assets in there? So they call it the nav, the net asset value. They cannot figure that out until the end of business when the stock market closes and all the stocks that are within that mutual fund close at their closing price. Then they tally up all the closes and they're able to calculate, depending on how much money was invested in each one by the fund itself, the net asset value of the fund. The problem with that is this. You can only buy and sell it, as I said, at the close of business, the day that you put your order in, and let's say it's 10 o' clock in the morning, and the markets, you hear that they've opened up the straight, that everything's going to skyrocket, that the war is over and you know that this market is going to go up and you want to buy the Standard and Poor's 500 Mutual Fund and you put in an order to buy the fund, not the etf, the fund, the Vanguard fund, you do not get it until the close of business that day. So even if the Standard and Poor's 500 index skyrocketed 10% that day, you would buy it at the highest price because you didn't get to buy it at 10 o', clock, right when the news broke, if you heard there was horrific news and these markets were going to crash and you wanted to get out and you put your order into sell, guess what? You would not be able to sell to the end of business that day. Think about it. With an exchange traded fund, it's a fun that trades on a stock exchange and it trades exactly like A stock, oh, it has different stocks in, has different bonds in it depending on what type of ETF you buy. It has different things in it, but it trades every day like a stock. The same way you want to buy a stock at 10 o' clock in the morning, put in your order at 10:01, it's yours. You want to sell it 10:01, you can do it anytime you want, especially when the markets are open. There are some after hour trading, but for most of you, you do it when the markets are open. Do you understand why there's a huge advantage to having an exchange traded fund that trades like a stock that than a mutual fund? Because if you get news that the market's going to go up and you want to participate in it, put your order in. Maybe you want to buy the whole 500 index. You want to buy the Spy or the Voo or whatever it is, you get it right away. That is a big deal. Everyone. Also, there are many mutual funds out there that have minimums. You have to have a minimum of $3,000 to invest in it or whatever it may be with an exchange traded fund that happens to be purchased at a brokerage firm that offers you no commission. So you can buy and sell at any time without any fees whatsoever. And they allow you to buy slices of the etf. Which means, let's say you wanted to buy one of my favorite ETFs, SMH, the VanEck Semiconductor ETF. Do you remember me telling you last week, oh, just buy smh, just do this. Well, it's up about 9% since last week. But anyway it's trading right now at about $506 a share. That's what it closed on on Friday. Let's say you don't have $500, okay? Because it's an ETF. And if your account is with a brokerage firm that allows you to, maybe you could say I have $50 and you could buy $50 worth of SMH. Some brokerage firms have like a $5 minimum, but you could invest no matter what, even if you don't have a lot of money. So it's important for you to know about exchange traded funds and it's important for you to understand that how exchange traded funds are evolving are very, very different. And those are some of the things that you are going to learn about in the webinar Part two. So I like exchange traded funds a lot. I still like individual stocks a lot. But for those of you who really are writing me and you're saying I don't know, what should I do with this $100,000 that my D or just got or this or that? It's very difficult to recommend individual stocks when a lot isn't known about you and your tolerance for risk exchange traded funds. Take the confusion out of it for at least most of you. All right, that's the Susi school for today. So you learned the history of ETFs, you learned why Ms. Orman likes ETFs better than than mutual funds. And you learned that we're going to have a really great surprise in part two webinar with Mr. Keith Fitzgerald. So again, if you have not yet registered for the webinar, please go to susieorman.com and do so. The replay of last Thursday's webinar will be going on till tomorrow night. And then, by the way, maybe we'll cut it down and I'll put it on my YouTube channel. Just that simple. Which happens to be YouTube.com Susie Orman, one last thing. There is somebody out there that is targeting all of you who have written a book. They go onto Amazon, they see that maybe you're an independent author and they are writing you using an email that looks like mine, but it's not. And they are telling you how much they love your book and how they want to help you and maybe I'll hook you up with one of my agents and things like that. And you start writing them back. And at the bottom of this, they have a picture of me in my red jacket. They have suziorman.com they have my bio, but they say respond to infoosieorman.com I do not have that email address. It is a scam. It is a fake. And so I have posted on Instagram the Women and Money community app on everywhere saying do not respond. And if anything, you should report this. You know, there's three little dots next to a thing that allows you to report something. This person, in my opinion, is extremely dangerous. Stay away. Stay away. My little heart broke today because somebody wrote me and they got a bounce back. They said, you know, I wrote you back, Susie. But it bounced back. Obviously this guy is changing his email address. But anyway, so I thought I'd just continue our conversation. And I said, I'm so sorry, but that wasn't me. And I had noticed because he sent me everything. He had this big conversation with this person. He told them, thinking it was me, that his background was a lot like mine and all these things. And this guy writes back to him and says, oh, I love how much we're so similar and I love your book. I'm going to connect you. So after I wrote this person and I said it wasn't me and I told him exactly what to do, he wrote back again and he said, wait, are you telling me you're not going to introduce me to your agent? He really couldn't comprehend that he was dealing with an imposter. Which is another reason why you all should look into the ultimate scam protection. Just telling you. And you can find out more about it on Suziorman.com it is right there. So to also protect all of you a little bit more, we're changing the email from asksusypodcastmail.com because Gmail, it's too easy to do a Gmail account. The new podcast address that all of you should write into if you have a question that maybe you want KT to choose. And, and I'll answer it on the podcast is podcastsusie.com so write that down. So we're going to podcastsksusie.com because that's a podcast address that somebody can't really do much with. All right, so we're having a change. Now for all of you who wrote into asksusypodcastmail.com we have all of those emails, so don't worry about it, but all the new ones should go to podcastsksusie.com and for those of you who have gotten an email from this really bad person, just ignore it, delete it, and report it. Okay? Just that simple. All right, everybody, so until Thursday, there's only one thing that I want you to remember when it comes to your money, and it's this. People first, then money, then things. Now you stay safe. Okay? Bye. Bye. We are strong we are wise we will not apologize we are here we will thrive together we, we will rise we're the rudd up in our face and everything it takes we are strong we are wise together we will rise I know and you know that there are many of you out there that have home equity lines of credit. But do you have one with a 3.99% fixed interest rate for six months and then prime plus zero? I doubt it. So I want you to go to myalliant.com and check out what I think is the best HELOC on the market