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Suze Orman's Women & Money (And Everyone Smart Enough To Listen)
Why Friendship Isn't a Financial Plan
00:16:45
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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.
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May 17, 2026 welcome to the Women in Money podcast as well as everyone smart enough to listen. Hi everybody. Robert the producer here. Now, as you know, Susie and KT have been in Japan for the past couple of weeks and they're now on their way back to the States. And yes, we did get a bunch of shows pre recorded, but this one is going to be an important re listen. And let me tell you why I picked this particular episode for you today, as you may or may not know, because Susie teases me about it here on the podcast. I go to a fair amount of concerts every year and the other day I was chatting with a person I met at a show while we were waiting for the band to come on and she mentioned that she wasn't sure she'd be able to keep seeing concerts as much because her new financial advisor wasn't performing as well as the previous one did. So I asked her why she switched and she said, oh, I'm doing a favor for my friend who just started their financial planning business. So I pulled out my phone and I sent her the episode, you're going to hear highlights from today and suggested that, you know, if she wants to, maybe she should start following Susie. Now's a good time for Friendship Isn't a Financial Plan. To come back to the top of your feed, we expect to hear all about Susie and KT's trip to Japan this coming Thursday. But for now, here's Susie.
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We're going to start Suzy School with a story. And the lesson of the story is this. Friendship isn't a financial plan. Friendship isn't a financial plan. Okay? That's the lesson of this story. Are you ready? So I'm telling you this story truthfully because I really think every one of you needs to hear this. Especially, you know, women. We tend to do things we don't want to do. We say yes when we want to say no. We think one thing, yet we say another. And I include myself in this, by the way. I've learned that lesson, trust me. My new lesson is don't say yes, Suze Orman when you want to say no. So if we're not careful, then this situation could possibly happen to you and it can cost you a whole lot of money. There's this woman, and let's just call her Susan, okay? And she had about $2 million invested with a financial advisor who had been doing absolutely remarkable for her. And we're talking consistent 15, 20, even 28% returns over the past few years, which is spectacular. And he charged her a 1.5% advisory fee. Now, I know, I know I told all of you I wouldn't be paying more than 1% in an investment advisory fee. But sometimes when an advisor is incredible demand and they are producing results like the ones I just told you about, year after year after year, that if they want to charge 1.5% and after that one and a half percent fee, they're still talking 15, 20, 28, 30% returns. I don't have a problem with that. So here we are, and one day Susan is out to lunch with her really, really good friend. And what did good friends do? They always talk about their kids. And the good friend happens to say, Susan, my son just became a financial advisor and is it possible that you could do me a favor? Do you think you would transfer your account to him so he can look like he has clients that have money? Think about what this good friend just asked Susan to change her account to her son who just became a financial advisor, just so he can look good. Now, besides the fact that I've told all of you in general, I wouldn't pay more than 1% for an investment advisory fee unless the advisor is seriously worth it and the numbers tell the story, I've also said to you I wouldn't dare invest with somebody, especially in these kinds of markets, who hadn't been an advisor for at least five years, 10 years, 15 or 20 years, many, many years. I wouldn't touch it with a ten foot pole. But because Susan didn't want to upset her friend, because even though she may have wanted to say no, she said, okay, yes, yes, I'll do it. And I find that most women say yes out of guilt. You know, I say this all the time. Women would rather say yes out of fear that somebody won't like them anymore versus no out of love for herself. So what did she do? She actually called her financial advisor up and told him, I'm moving my account. And when the advisor said, why in the world are you moving your account? And she said, well, number one, and the most important reason is because he's only charging me 1% instead of 1, 1 1/2 percent. Okay, now just want you to think about this. And this is the Susie school lesson of the day. And the one mistake I want you always to avoid. You never base financial decisions on friendship. You never judge an advisor solely by their fee. It's not the fee that matters. It's the results. It's the track record. It is the performance. Would you rather pay someone one and a half percent who has proven that they can make you real sizable returns year in and year out, or 1% to someone who's absolutely brand new, untested, and simply hoping to save that half a percent and to help them out? You have to know the answer to that. You just have to know. And the lesson here is what? Friendship is not a financial plan. Guilt is not a strategy. Do you get this, everybody? And loyalty does not grow your money. It does not. So I want you to write this one lesson down. You must protect your your own financial security, even if that means say no to someone you care about. All right? So now that we know that friendship isn't a financial plan, the next thing I want you to learn is about tax lost harvesting the correct way. And the reason that I say the correct way is because I talked about this and I told you some of the things that I was doing in my own account. And then you go to do it and you write me and go, no, no, don't do that. So let's try this again. Tax loss harvesting is when you have gains in your investment account outside of a retirement account, and possibly losses as well. And you want to offset your gains with your losses. So you don't owe as much in income tax as you would if all you had was gains. So let's talk about this. You need to first know the difference between realized gains versus unrealized gains. So what is a realized gain? A realized gain. Think of the words that I'm using. A realized gain is obviously you realized your gain. You actually got it, which means you sold something. You took a profit, and you took a profit because you sold it for more than you paid, and that's a realized gain. The IRS sees it, and then the IRS taxes you on it. Just that simple. What is an unrealized gain? And this again is just a fancy word for you haven't realized them. You have a profit, but you haven't sold it yet. So the gain lives only on paper. You haven't realized it. So there's nothing taxable yet. So how does tax loss harvesting work? All right, just listen. Let's Say you have a stock you don't want anymore and it's sitting at a loss. You can sell that stock, realize the loss, and use that loss to offset any realized gains that you already have. That's one way that you can do it. Now, sometimes you actually have more of a loss than you do gains. So if you don't use up all of your loss, you can carry it forward to future years. If you don't have any gain at all, you can take $3,000 off and keep doing that every year. So why am I telling you all this? Because a lot of you heard me say you sell your losses against your gains. So you don't owe income taxes. But here's the problem. You never, ever sell a stock at a loss. If you want to owe, own that stock, and you best write that down. You never sell a stock just to take a tax loss if you believe in that stock. Because listen to me, when a stock you love goes down, that is not the time to run from it. That is the time to do what everybody dollar cost average into it. That is the time to buy more. So let's say you love Apple and it drops, it's down. You don't sell it to take a tax loss. You buy more shares at a lower price and bring down your average cost. So can we just get that one thing straight? If you still want the stock, you keep it. You only sell a losing stock if you want to get rid of it and you don't want to own it anymore. Got that? So you really need to understand that, because some of you are doing this because you're writing me. You have some losses in stocks that you actually like, great stocks, and you want to sell those stocks to take a loss to offset some realized gains that you have in your portfolio, obviously outside of a retirement account. And I'm like, please don't do that. And people are asking me, well, why shouldn't I do that? And the reason you shouldn't do that is when you take a loss in a stock, you cannot buy that stock back for at least 30 days. Now, 30 days may seem like a really short period of time, but not in these markets. I have seen stocks go down 40 points, and all of a sudden, two weeks, they're up 60 points. So you think you're going to outsmart these markets. And all of a sudden you sold for a little loss, and now 30 days hasn't passed. And now you sold it at, let's just say $50 a share. You bought it at 60, and now it's at 80. But you weren't able to still be in it because you sold it at a loss simply to take a loss. No. Again, you only sell a loss when you no longer want to own that stock and you can use that loss to help yourself for tax purposes. Anything else? I don't think so. So you're confused about that. If you have, however, a stock that you no longer want, which was true in my case, there were two stocks that I had a loss on and I no longer wanted to own those stocks. I made a mistake. Fine, I'm going to take the loss. But at the time when I did that, I didn't have any realized gains to offset that loss. I didn't realize any gains yet. I had a lot of unrealized gains. Loss, lots of unrealized gains, but no realized gains. Because I still like all the stocks that I own except for those two. Okay, so what did I do? And this was just an example. I sold the number of shares of stock that I had a big gain in that was equivalent to the loss that I was taking. So they offset each other directly. So what did I do then? I immediately bought the stock that I had a gain in back the exact same numbers of shares. Now, what did I gain by doing that? Let's just say I bought that stock at 7 and now that stock is 160 or 70. So even if I just sold 10 shares to offset my loss, let's say that was true, and I bought those 10 shares back immediately. Now, my cost basis on those 10 shares is $170 a share. If that stock continues up and I now sell it at, let's just say, $300 a share, I'm only going to have a gain of 130 points versus $7 to 300. Do you understand what I did? So don't think it's just so simple where you sell stocks to offset gains. You only sell stocks that have a loss in it to offset gains if you don't want to own those stocks ever again. All right. Do I think that's enough for Susie School today? I think I do. So what did we learn? We learned that friendship is not a financial plan. We learned that you only sell stocks at a loss to offset gains when you no longer want to own those stocks. So until Thursday, Ms. Travis joins us again for another Ask KT and Susie and Ne thing. There's only one thing that I want you to know when it comes to your money, and it's this. People first, then money then things. Now you stay safe. We are strong, we are wise we will not apologize we are here we will thrive together we will rise we're the faith 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 today.
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Neither Suze Orman Media nor Suze Orman is acting as a Certified Financial Planner Advisor, a Certified Financial Analyst and economist, cpa, Accountant or lawyer. Neither Suze Orman Media nor Susie 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 mentioned in these podcasts are legal documents created by a lawyer and distributed by Hay House.