# There Is No Such Thing As A Free Lunch

An episode of [Suze Orman's Women & Money (And Everyone Smart Enough To Listen)](https://invisiblenetwork.ai/podcast/1439621652), 28 Jun 2026, 36 min.

Audio: https://traffic.omny.fm/d/clips/2df1102a-5761-4c99-b489-aabd0161f8fe/44e0936e-923c-43c7-9e2a-aade00edf4d3/03fa9e4a-ecab-4e33-8d2d-b4770039d61f/audio.mp3?utm_source=Podcast&in_playlist=4e05fb00-5a5b-4ed9-b353-aade00edf4dd

On this Summer School with KT & Suze episode, Suze answers your questions about trusts, annuities, and planning for retirement. Plus, find out why that lunch you were invited to isn't really free and more! Learn more about the Ultimate Scam Protection here: SuzeOrman.com Watch Suze’s YouTube Channel Jumpstart financial wellness for your employees: https://bit.ly/SecureSave Protect your financial future with the Must Have Docs: https://bit.ly/3Vq1V3G Help with the Must Have Docs: • Email:support@musthavedocuments.zendesk.com • Phone: 888-510-0510 Get your savings going with Alliant Credit Union: https://bit.ly/3rg0Yio Get Suze’s special offers for podcast listeners at suzeorman.com/offer Join Suze’s Women & Money Community for FREE and ASK SUZE your questions which may just end up on the podcast. Download the app by following one of these links: CLICK HERE FOR APPLE: https://apple.co/2KcAHbH CLICK HERE FOR GOOGLE PLAY: https://bit.ly/3curfMI See omnystudio.com/listener for privacy information.

## Transcript

[0:08] Suze: June 28th, 2026. Welcome everybody to the Women in Money
[0:12] Suze: podcast and everybody's smart enough to listen. Suze O here and...
[0:18] KT: KT...
[0:20] Suze: Is in the house. And you may be wondering, but it's Suze School,
[0:23] Suze: why is KT here
[0:27] Suze: on a Sunday, which is when Suze School normally drops?
[0:31] Suze: So here's the lesson for today. Ready for it? Tell them, KT.
[0:36] KT: OK. Last Thursday we told you we had an announcement. Well,
[0:40] KT: here it is, everyone. Starting today, on Sunday, Suze and
[0:46] KT: I will do our podcast together. This is our new
[0:49] KT: schedule for summer. It's called Summer School with KT and Suze.
[0:55] Suze: And really it's a combination of Thursdays and Sundays that
[1:01] Suze: we will do today. We will not be doing new
[1:04] Suze: drops on Thursday anymore.
[1:07] Suze: Right, because why?
[1:09] KT: It's summer.
[1:10] Suze: It's summer. That's the only reason it's summer, and, and
[1:14] Suze: we don't wanna be at a schedule anymore.
[1:16] KT: No, it's our best reason. However, Suze did say, KT, if
[1:20] KT: something comes up in the middle of the week or whatever,
[1:23] KT: she absolutely will use this time to focus on a
[1:28] KT: Sunday school if needed, if needed, but this will be fun.
[1:31] KT: We're gonna have a lighter and fun summer schedule.
[1:36] Suze: So, every Sunday now is when we will drop a
[1:40] Suze: new podcast. Don't look for it on Thursdays because it
[1:44] Suze: won't be there anymore. Robert, what are we gonna do
[1:47] Suze: for those people who aren't listening to this? You're gonna
[1:50] Suze: have to maybe on Thursday, I'm now talking to Robert,
[1:53] Suze: the producer, right? You're gonna have to put something...
[1:55] KT: Make a little announcement.
[1:56] Suze: Announcement on it when they go on Thursday.
[1:58] KT: The girls have gone fishing. Tune in on Sunday.
[2:03] Suze: But anyway, I hope you understand. I hope you are
[2:06] Suze: happy for us. We're so happy. So KT, what do
[2:10] Suze: you got for me today?
[2:11] KT: Well, the first one, this is something I wanna share
[2:13] KT: with everyone. It's a thank you, a thank you to Suze.
[2:17] KT: She said, I'm writing to simply say thank you. About
[2:21] KT: 14 years ago, I followed your advice and invested in
[2:26] KT: a low-cost index fund.
[2:28] KT: Contributing to it every month at the time I was
[2:33] KT: far behind in my retirement savings and worried I would
[2:37] KT: never catch up and would end up very poor in retirement.
[2:41] KT: I wasn't a financial genius. I just had the good
[2:45] KT: fortune to hear your advice on one of your TV
[2:48] KT: shows and the intelligence to follow it.
[2:52] KT: That one decision made all the difference, Suze. Today at
[2:57] KT: age 65, I have accumulated more retirement savings than the
[3:03] KT: average person my age.
[3:05] KT: Something I never imagined would be possible back then. Following
[3:10] KT: your advice to invest consistently in a low cost index
[3:14] KT: fund was the single best financial decision I ever made.
[3:20] KT: I can't thank you enough for the positive impact you
[3:24] KT: have had on my life. With immense gratitude, Susan. Thank you, Susan.
[3:30] KT: That's sweet.
[3:31] KT: It's really true, everyone. I mean, listen, 14 years ago,
[3:36] KT: so time is our best ingredient.
[3:39] Suze: Time is the most important ingredient in any financial freedom recipe. Consistency,
[3:46] Suze: month in and month out. If you really don't know
[3:49] Suze: what to do, I'll still stick by if you don't
[3:52] Suze: know what to do, just do a
[3:54] Suze: index ETF just that simple. Could you make more money
[3:59] Suze: if you did other things? Yes. But if you just
[4:02] Suze: want simplicity, you don't want to think about it, and
[4:05] Suze: you just want to do it, great. And you might
[4:07] Suze: want to listen to last Sunday's podcast, because I gave
[4:12] Suze: you some great ideas there.
[4:14] Suze: All right. All right, go on.
[4:16] KT: OK, this is from Sharon.
[4:19] KT: Sharon said hello there KT and Suze. See, Sharon, I
[4:22] KT: picked you because it's our Sunday summer schedule. KT, I hope...
[4:26] Suze: Wait. What did one have to do with the other?
[4:29] KT: Because she said, KT, I hope my question is relevant
[4:33] KT: enough for others for Suze to answer this. So there
[4:37] KT: you go. She's being very thoughtful.
[4:40] KT: Suze, based on my data shared here, I'm 68. In
[4:44] KT: your opinion, do I really need a revocable trust? And
[4:49] KT: then she said, I listened to you insisting that everyone
[4:52] KT: must have a revocable trust in case they become incapacitated.
[4:58] KT: I understand that concern. Since I don't own real estate,
[5:02] KT: I get the sense this may not be necessary for me.
[5:07] Suze: Wait, are you saying...
[5:09] KT: I'm not done.
[5:09] Suze: Wait, are, are you saying there, did I just hear
[5:12] Suze: that right, because she doesn't own real estate, she thinks
[5:16] Suze: she can never be incapacitated.
[5:18] KT: Well, she said she doesn't think this is necessary for
[5:21] KT: her to have...
[5:21] Suze: But right before that KT, she said, I say that
[5:25] Suze: everybody should have one just... incapacity, right?
[5:28] KT: But wait, listen to this. Here's her thought. My 36
[5:32] KT: year old daughter is my sole beneficiary on all financial
[5:36] KT: accounts and is a joint account holder on a couple
[5:40] KT: of savings accounts and my checking. She is a small
[5:44] KT: business owner and may need to borrow money for her
[5:47] KT: business in the future.
[5:49] KT: The last part concerns me.
[5:52] Suze: Why are you looking at me like that?
[5:54] KT: Well, because she thinks because she has a 36 year
[5:57] KT: old daughter who said, Don't worry, Mom, I'll take care
[5:59] KT: of you, that she doesn't need an incapacity clause in
[6:05] KT: a trust.
[6:06] Suze: What is this woman's name?
[6:07] KT: This is from Sharon.
[6:09] Suze: Sharon, please, please, please, and everybody else out there.
[6:15] Suze: Why do I keep telling you over and over and
[6:20] Suze: over again? Why did the very first book I ever write,
[6:25] Suze: You've Earned It, Don't Lose It, in 1995, why did
[6:29] Suze: I make it such a big chapter as to why
[6:32] Suze: you all need a living revocable trust.
[6:37] Suze: Why? Because over all these years I have seen firsthand
[6:44] Suze: what happens to people,
[6:47] Suze: when they don't have a trust, not just with probate fees, fine,
[6:51] Suze: you want your kids to pay probate or whoever, I
[6:54] Suze: don't personally care about that.
[6:56] Suze: I care about that you get sick, you become incapacitated,
[7:01] Suze: you think you have everything under control. You think that
[7:05] Suze: you've named your 36 year old daughter to take care
[7:09] Suze: of everything, and you think nothing can happen to her.
[7:13] Suze: You think that she doesn't need a living revocable trust
[7:17] Suze: with an incapacity clause in it, Mamma, in case she
[7:21] Suze: gets hit by a car. Now she's incapacitated and you
[7:25] Suze: need to take care of her, but you can't make
[7:28] Suze: any decisions with her because she doesn't have a durable
[7:31] Suze: power of attorney for healthcare, and she now is over
[7:34] Suze: 18 years of age, so you can't make decisions for her.
[7:38] Suze: So this isn't about age. This is about the reality
[7:42] Suze: of life, everybody, and what can go wrong. So all
[7:47] Suze: I'm asking you to do is prepare for the worst
[7:51] Suze: and hope for the best.
[7:53] Suze: A will does not help you in case of an incapacity.
[7:58] Suze: In many cases, a power of attorney for finances will
[8:03] Suze: not help you. Why? Because banks might not take them.
[8:07] Suze: We've talked about that. We talked about that on last
[8:10] Suze: Thursday's podcast. Things go wrong and when they go wrong,
[8:15] Suze: guess who you all come to? You come to me.
[8:18] Suze: So how do we solve that before it goes wrong?
[8:22] Suze: I tell you what you need. You might not want it,
[8:25] Suze: but every single one of you needs it, which is
[8:29] Suze: why the must-have documents, seriously, were created over 25 years ago,
[8:36] Suze: which is why they were made for you
[8:39] Suze: to be able to share them for free with your
[8:41] Suze: loved ones, which is why we allowed updates absolutely free
[8:46] Suze: for you in case there was an update. That's why
[8:49] Suze: we allowed you to make as many changes as you wanted,
[8:53] Suze: absolutely free. Why?
[8:56] Suze: Because I don't want you to see all your hard
[8:59] Suze: work to attain financial freedom to possibly go down the
[9:04] Suze: drain just because you haven't taken time to do what?
[9:09] Suze: create what we call the must-have documents again. You should
[9:14] Suze: check them out at musthavedocs.com.
[9:19] KT: Great. Yeah, I, I mean 36 year old daughter, right,
[9:23] KT: that's still very young,
[9:26] Suze: But you know what's interesting about that email, the very
[9:29] Suze: last line.
[9:31] Suze: She's going into business. She may need to borrow money.
[9:35] KT: Yes, and Mommy was worried about that... concerned
[9:37] Suze: Yeah, because KT, we've seen it all. Everybody, Mama here
[9:42] Suze: already has a gut feeling about it, so maybe the
[9:45] Suze: daughter isn't the right one to make as your successor beneficiary.
[9:50] Suze: Just saying, all right, KT, go on.
[9:52] KT: OK. This is from Sherry. She said, Hello, Suze. I
[9:56] KT: went to a luncheon targeting seniors.
[9:59] Suze: I hate those luncheons. You go for... oof I have them.
[10:04] KT: Stop, stop, stop. Let me tell you what this is about.
[10:07] KT: It is for MASA Emergency Shield plus membership to cover
[10:13] KT: medical transportation.
[10:16] KT: Suae, to get the special price, I had to buy
[10:19] KT: it that day. Have you heard of it? Is it legitimate?
[10:23] KT: Is MASA easy to work with? And then Sherry, who
[10:27] KT: was very smart, she said, I thought to myself, before
[10:30] KT: I buy, I have to ask Suze.
[10:34] KT: She said it's about $6,000 for a lifetime for her
[10:39] KT: and her husband.
[10:40] Suze: And did they say they had to buy it that day?
[10:42] KT: Yes.
[10:43] KT: I knew it.
[10:43] KT: At the lunch and before dessert, probably.
[10:45] Suze: You all listen to me and listen to me closely
[10:49] Suze: so that I don't get indigestion, just because you went
[10:52] Suze: to get a free meal to be sold something.
[10:56] Suze: There's no such thing as a free lunch, seriously, and
[11:00] Suze: when people have to entice you, and as seniors, I
[11:04] Suze: get it.
[11:05] Suze: 'Cause maybe you don't have the money to go out
[11:07] Suze: and buy yourself meals. Maybe you wanna be with other people,
[11:12] Suze: but when somebody is offering you a free meal, it
[11:16] Suze: is a chance to sell you a trust, to sell
[11:20] Suze: you investments, to sell you this MASA thing. So, let
[11:25] Suze: me just answer this for all of you. MASA is
[11:28] Suze: a real company.
[11:30] Suze: All right, it's just that simple, and it's an emergency
[11:34] Suze: shield plus plan that targets, seriously targets seniors at luncheons,
[11:41] Suze: and it is a red flag, and you do not
[11:44] Suze: need to buy it on the spot number one. The
[11:48] Suze: value of this product depends heavily, KT on your existing
[11:53] Suze: Medicare
[11:54] Suze: and supplemental coverage, your travel habits and your risk tolerance.
[12:00] Suze: So number one, legitimate company, but they have seriously mixed reviews.
[12:06] Suze: Now some people love them. If you go to Trustpilot,
[12:10] Suze: you'll see that many customers kind of praise them and
[12:13] Suze: things like that. However...
[12:16] Suze: It also has many cons against it. Some people report
[12:22] Suze: that they're pushy, they're pressured to sell, they didn't receive
[12:26] Suze: the contract details, and on and on and on. Now,
[12:29] Suze: what's important for all of you to understand is this
[12:33] Suze: the pricing that this person just named in the email
[12:37] Suze: that she sent KT is exactly the same pricing that's
[12:41] Suze: on the MASA website. There is no deal there.
[12:45] Suze: So, if you really want it, you can go and
[12:48] Suze: look at it, but chances are for like $6,400 or
[12:53] Suze: whatever it is, I just, I just, I don't know.
[12:58] Suze: I think twice, but here's the thing you really got
[13:00] Suze: to think about, you'd never buy anything on the spot,
[13:03] Suze: you research it, go and see what others are saying
[13:07] Suze: about it. Some people like it, and some people do not.
[13:11] Suze: And maybe you don't need it at all. All right, KT.
[13:15] KT: A lot of those seniors are pressured into being embarrassed
[13:19] KT: if they don't buy because they just got a free lunch,
[13:22] KT: and that's the sad thing. You should always say thank
[13:25] KT: you so much for my lunch. Let me think about it.
[13:27] KT: I'll get back to you.
[13:29] Suze: You know what I've always wanted us to do in
[13:30] Suze: Florida because they're rampant here in Florida.
[13:33] KT: We get these invites...
[13:35] Suze: All the time, and I'm like,
[13:36] KT: Once a week at least
[13:36] Suze: KT, let's go. Let's go get a free lunch and
[13:39] Suze: let's see what happens when the people giving it see
[13:42] Suze: Suze Orman and KT walk in and sit down.
[13:45] Suze: I've often wanted to do that. Should we do that?
[13:48] KT: No.
[13:49] Suze: Why not?
[13:50] KT: It's sad.
[13:51] Suze: I wanna do that.
[13:52] KT: It's sad for the, for the person standing behind the podium
[13:57] KT: trying to sell. And no, no, no, we're not. We're not...
[14:00] Suze: Wait, wait, wait, wait. You feel sorry for the person
[14:03] Suze: that's trying to sell people something that they probably don't need.
[14:06] Suze: If it's something legitimate, they should love that Suze Orman
[14:10] Suze: has walked in to say she'll verify what I'm saying
[14:14] Suze: is true.
[14:15] Suze: If all of a sudden they get embarrassed and they
[14:17] Suze: freaked out, that is a sign that everybody should get
[14:20] Suze: up and leave after dessert, including us. Next question, Miss. Travis.
[14:25] KT: This is from Marie. She said, Hi, Suze and KT.
[14:29] KT: I just met with my Fidelity representative.
[14:33] Suze: Of course. Oh, wait, wait, want me to tell you
[14:35] Suze: what the Fidelity rep wants to...
[14:37] KT: No, no, no.
[14:39] KT: He kept trying to get me to move my money
[14:42] KT: into fixed rate contract annuities telling me that they are
[14:47] KT: good annuities and that they are the same as CDs.
[14:51] KT: I went through your prior annuity podcast, and I'm still
[14:55] KT: not sure if this is a good idea.
[14:57] KT: The word annuities makes me nervous because there are so
[15:02] KT: many bad ones out there. Are these OK to invest in,
[15:06] KT: or is this a scam?
[15:07] Suze: Vote number one, it's not a scam. So Marie, just
[15:11] Suze: know that. But why did I know that that was
[15:14] Suze: gonna happen? It's because every email I'm not joshing right now, KT,
[15:20] Suze: that we get who meets with a Fidelity advisor all says:
[15:26] Suze: Annuity, annuity, annuity. I have not gotten one where the
[15:31] Suze: email says, oh, this index fund, do this, do that.
[15:36] Suze: Obviously the adviser on some level is being compensated for that.
[15:42] Suze: I don't think they're being compensated by the normal 5, 7, 8% commission,
[15:46] Suze: but there's something going on.
[15:49] Suze: And so if you meet with a Fidelity adviser and
[15:52] Suze: they suggest any type of annuity, can you just ask
[15:56] Suze: them how much do they pay you? Do you get
[15:58] Suze: more if you suggest an annuity to me versus an
[16:02] Suze: index fund? Can you just ask them that question? But
[16:06] Suze: what is not OK,
[16:09] Suze: is that an annuity is not like a certificate of
[16:14] Suze: deposit on any level. A certificate of deposit comes with
[16:19] Suze: a guarantee from the federal government, FDIC, if it's from
[16:24] Suze: a bank, up to 250,000. An annuity
[16:28] Suze: is a whole different guarantee, and it's subject to the
[16:33] Suze: claims paying ability of the issuing company, meaning that if
[16:37] Suze: the insurer gets in trouble, KT, your guarantee is only
[16:41] Suze: as good as their balance sheet.
[16:43] Suze: And it's with a state guarantee association offering some backdrop,
[16:48] Suze: but it's not FDIC level protection. So shame on that
[16:52] Suze: adviser for saying to this person that it was just
[16:56] Suze: like a certificate of deposit. That's number one. She didn't
[17:01] Suze: say how old she is, but with an annuity.
[17:06] Suze: If you take out your money before the age of
[17:09] Suze: 59 and a half, not only do you pay ordinary
[17:14] Suze: income tax on it, KT, but there's a 10% penalty
[17:18] Suze: as well. Now, most annuity companies do allow you to
[17:24] Suze: take out 10%
[17:25] Suze: a year without any of the 10% penalty, but you
[17:30] Suze: still will pay ordinary income tax on it. Also, there
[17:34] Suze: is a surrender charge with most of these annuities. Fidelity
[17:40] Suze: sells what's called multi-year guaranteed annuities, so it's for three years,
[17:45] Suze: and the interest rate is guaranteed for that 5 years that.
[17:48] Suze: But there's a surrender charge, and the surrender charge with
[17:52] Suze: the one that's three years.
[17:54] Suze: It is 7% a year for all three years. So
[17:58] Suze: if something happens and she needs to come out seriously,
[18:02] Suze: it's 7%.
[18:04] Suze: Now the 7% can never go into her original principal,
[18:09] Suze: but it can sure go into her interest that she's
[18:12] Suze: earned if it's a 5 year annuity, it goes 7-7-7-6-5.
[18:19] Suze: So for every one of those years,
[18:22] Suze: there is a surrender charge, so there are so many
[18:27] Suze: things that you need to think about. Obviously a certificate
[18:31] Suze: of deposit, when you get your interest, it's taxed yearly.
[18:36] Suze: With an annuity. You don't pay taxes on it until
[18:40] Suze: you withdraw it or you withdraw the interest. However, with
[18:44] Suze: all of that said,
[18:46] Suze: with certain annuities in certain situations when they are fixed
[18:55] Suze: and you know you're not going to need the money
[18:58] Suze: and you want your interest rate to compound and at
[19:02] Suze: the end of the three years or the 5 years
[19:05] Suze: you just want to draw it out little by little.
[19:09] Suze: OK, I don't necessarily have a problem with it, but
[19:13] Suze: there are many, many things that you need to really
[19:17] Suze: think about before you do this. Not so bad, Marie,
[19:22] Suze: but shame on the adviser for saying that they were
[19:25] Suze: just like a CD.
[19:29] Suze: Go on, KT.
[19:30] KT: Suze, our next question is from Justin...
[19:33] Suze: This is kind of like a mini Susie school.
[19:35] KT: Well, listen to Justin's first line. We're gonna have to...
[19:38] KT: maybe I'll send him a little something. He said, Hi,
[19:41] KT: Susze and KT.
[19:43] KT: I am one of the men smart enough to listen
[19:46] KT: and so enjoy starting my Sundays and Thursdays with you.
[19:52] KT: Uh oh, Justin, you only get us on Sunday this summer.
[19:55] Suze: Well, unless Robert wants to play best of on Thursday.
[19:58] Suze: Maybe he could always do that. All right, so that's
[20:01] Suze: an idea.
[20:01] KT: That's a good idea. I am working on my revocable trust,
[20:05] KT: and I have a question about our home. My wife
[20:08] KT: and I have about 10 years left on our mortgage.
[20:11] KT: Should we contact the mortgage company and get approval to
[20:17] KT: transfer the title of our home to the trust.
[20:21] KT: Or is it OK to utilize a transfer on death
[20:25] KT: deed which would transfer the title of the house upon
[20:29] KT: our deaths to the trust?
[20:32] Suze: I wouldn't do it that way, and the main reason
[20:35] Suze: is why.
[20:38] Suze: What for? First of all, you do not need approval
[20:43] Suze: to have your home transferred into the name of the
[20:47] Suze: trust as long as it's still your primary residency and
[20:51] Suze: you continue to occupy it and all of that, all right?
[20:55] Suze: You don't need to, you're actually protected by law.
[21:00] Suze: There is a law, an act, and I think it's
[21:04] Suze: called the G A R N Street Germaine Act. Did
[21:09] Suze: you know that?
[21:11] KT: No.
[21:11] Suze: Right, where it says, (Suze starts laughing)
[21:22] KT: Suze, it's like me asking you, do you know how
[21:24] KT: to make a zucchini wrap?
[21:26] Suze: I do now.
[21:28] Suze: Anyway, where a lender cannot enforce a due on sale
[21:34] Suze: clause when you transfer your primary residency into a revocable
[21:38] Suze: living trust again, as long as you remain a beneficiary
[21:42] Suze: of the trust and you continue to occupy the home
[21:46] Suze: as your primary residency now if it's a co-op,
[21:51] Suze: in New York, for instance, they may have a problem
[21:54] Suze: with it, so they may not let you do it.
[21:56] Suze: But the truth of the matter is you normally can
[22:01] Suze: do it, so you don't have to inform your lender
[22:04] Suze: that you are going to be doing that, in my opinion.
[22:07] Suze: All right, KT.
[22:09] KT: OK, that was a funny question.
[22:12] Suze: KT, What was the name of that act?
[22:15] KT: Um, shrimp. I...
[22:18] Suze: Come on, KT, I just said it two minutes ago.
[22:22] KT: It's Garn
[22:24] Suze: Garn, Garn, what gar garn, right? Saint...
[22:29] KT: It's Germaine.
[22:31] KT: Saint Germain. I know Saint Germain. I lived in Paris.
[22:34] Suze: Thats' why I am asking you...
[22:35] KT: Saint Germain, Saint Germain.
[22:38] Suze: Act now. You'll never forget it. And what's it good for?
[22:42] KT: I don't know, but
[22:45] Suze: You do. It protects people from having to pay off
[22:50] Suze: their mortgage when they put it in trust.
[22:52] Suze: Oh, there's my girl. OK, now we just have to
[22:56] Suze: figure something out like that with Roth. What would be
[22:59] Suze: very Parisian with a Roth?
[23:01] KT: Hmm.
[23:05] Suze: All right, never mind. Go on to the next question.
[23:08] KT: Here's my next question. This is from Tristan. He wrote, Hi,
[23:12] KT: Auntie Suze and Auntie KT. All right, Tristan, here we go.
[23:18] KT: Tristan over here, a millennial man smart enough to listen.
[23:22] KT: Hope you ladies are staying out of trouble so far
[23:25] KT: this summer. I think he knows us. Right now, my
[23:29] KT: entire social circle is wrapped up in FOMO over these
[23:35] KT: massive summer IPOs. Do you know what FOMO is, Suze?
[23:40] Suze: Are you kidding me.
[23:41] KT: Fear of missing out. As you know, SpaceX just made
[23:46] KT: its public debut, and all my friends...
[23:49] Suze: I have a question. Did you have to look up
[23:51] Suze: what FOMO meant?
[23:52] KT: Yes, because I didn't know what a FOMO was.
[24:00] KT: All right, let me keep going. It gets better. It
[24:03] KT: gets really better. Ready for this because I, I added something.
[24:07] KT: All my friends are bragging about the share allocations they
[24:10] KT: managed to get as real investors. That's from SpaceX. I
[24:15] KT: sat the SpaceX IPO out with OpenAI and Anthropic's IPO
[24:21] KT: on the horizon within a few weeks and a month apart.
[24:24] KT: Should I consider participating,
[24:27] KT: in the upcoming IPO share allocation even with the 15
[24:32] KT: to 30 day lockup period. The financials seem to be
[24:36] KT: in better shape than SpaceX. I try to practice discipline
[24:41] KT: as you always said in your podcast, but resisting the
[24:45] KT: FOMO is tough when these IPOs are the only thing
[24:50] KT: people talk about at your social functions and work right now.
[24:54] KT: I value your judgment more than the hype machine. Thank
[24:58] KT: you as always. And then Tristan also gave us a
[25:02] KT: bonus question. World Cup, Suze, who do you think's gonna win?
[25:07] Suze: It's not, who do I think is gonna win.
[25:09] KT: Who do you know is gonna win?
[25:10] Suze: It's not who I know is gonna.
[25:11] KT: Who do you want to win?
[25:13] Suze: USA baby. USA baby. What?
[25:17] Suze: Not me.
[25:21] Suze: What gotten into you?
[25:21] KT: I want Colombia.
[25:23] Suze: Oh, because of Colo.
[25:25] KT: Yes, I want Colombia. Don't tell anyone, but...
[25:29] Suze: You just told everybody,
[25:30] KT: ... if they don't get it, I want USA to win.
[25:33] KT: USA is doing a great job, but Colombia's in the,
[25:38] KT: in there.
[25:39] Suze: Right, so...
[25:39] KT: So, so wait, I, I also wanna tell Tristan what
[25:42] KT: you want to maybe do, Tristan, and discuss this with
[25:46] KT: your friends. Tell them you're part of a growing counter
[25:49] KT: concept called JOMO.
[25:52] KT: Do you know what Jomo is, Suze?
[25:55] KT: It's true. It's a, it's a, it's a real deal.
[25:59] Suze: You have just asked me a question that I don't
[26:02] Suze: have a clue what the answer is. Wait, what do
[26:05] Suze: you think about that?
[26:06] KT: I think that's great. Here, listen to what it is.
[26:09] Suze: Wait, aren't you impressed?
[26:09] KT: Tristan and Suze, you might wanna be part of the
[26:14] KT: growing counter concept called JOMO.
[26:17] Suze: What is that?
[26:18] KT: Joy of missing out.
[26:20] Suze: Is that true?
[26:21] KT: Yes, it is. It's real.
[26:24] KT: Because I didn't know what FOMO was, so I did
[26:27] KT: have to look it up, and they said you may
[26:29] KT: want to be part of the growing counter concept or
[26:32] KT: counterculture called JOMO, the joy of missing out.
[26:38] KT: There you go.
[26:40] Suze: Do you not want me to answer his question, or
[26:42] Suze: do you feel like that was it?
[26:44] KT: Oh, I forgot. Oh yeah, answer Tristan's question. He wants
[26:49] KT: to know if he should join the...
[26:51] Suze: Yeah, listen to me.
[26:55] Suze: You know, you have to really understand that an IPO
[27:01] Suze: is not like a celebration.
[27:03] Suze: It's like this exit strategy. It is the moment, now
[27:07] Suze: listen to me closely, when angel investors, venture capitalists, private equity, founders,
[27:17] Suze: and early employees finally get to turn paper wealth into
[27:22] Suze: real money.
[27:25] Suze: And that's what it is all about. They are selling,
[27:29] Suze: you are buying, you got that? And that alone should
[27:34] Suze: tell you everything. I can tell you, because a lot
[27:38] Suze: of our money is invested in private equity.
[27:43] Suze: And when you invest in private equity, you don't know
[27:46] Suze: if you're gonna get any money back, you don't know
[27:49] Suze: how long it's gonna be tied up for, and if
[27:51] Suze: it happens to IPO such as a SpaceX, then you
[27:56] Suze: are waiting for your lockup period to come up where
[28:00] Suze: you can sell in most cases, and make a lot
[28:04] Suze: of money.
[28:05] Suze: So, again, I want you to think about that. Now,
[28:09] Suze: why are IPOs high priced? Why do they price them
[28:14] Suze: so high? Think about this, Tristan.
[28:17] Suze: And it is because the sellers want the highest possible valuation,
[28:23] Suze: because the banks want the highest possible fees, because the
[28:29] Suze: media wants the highest possible excitement, so you are not
[28:34] Suze: invited to a party, my friend. You are being invited
[28:38] Suze: to provide liquidity. That's what you are doing.
[28:42] Suze: So why do retail investors get the worst terms? Because
[28:47] Suze: you are the least informed participant. You don't see... and
[28:52] Suze: all your friends, they have not seen the secondary market transactions,
[28:56] Suze: the private valuations, the liquidation preferences, the inside lockup schedules,
[29:02] Suze: the debt covenants, the dilution waterfalls. You see the marketing.
[29:08] Suze: So how do you resist the FOMO when everyone around
[29:11] Suze: you is bragging.
[29:13] Suze: You already know the answer. FOMO is not a financial strategy,
[29:19] Suze: and here's the mind shift that I want for you.
[29:23] Suze: Your friends are chasing excitement. You are building wealth. They
[29:28] Suze: are not the same sport, and the people who brag
[29:31] Suze: the loudest at parties are almost never the ones who
[29:34] Suze: retire early. Just saying.
[29:38] Suze: OK, I could have given a talk on stage with
[29:41] Suze: that one. Do you see how these are kind of
[29:44] Suze: like mini Suze Schools?
[29:45] KT: That was a good one. OK, next question says in
[29:48] KT: the subject retirement, baby.
[29:52] KT: Hi Suze and KT, my husband and I love your podcast.
[29:56] KT: We have learned so much over the years. Thank you.
[29:59] KT: We are retiring early in 2027. We plan to sell
[30:04] KT: our home in Pennsylvania and downsize in North Carolina. The
[30:09] KT: list price of $635,000 for our home, which we own
[30:14] KT: outright and have no debt, will be the basis for
[30:18] KT: the budget on the investment in our next home.
[30:22] KT: We are moving in with my father to conduct our
[30:25] KT: home search and anticipate being there two to six months.
[30:30] KT: What should we do with the money during this time?
[30:33] KT: We plan to pay cash for a home when we
[30:36] KT: figure out where we wish to settle.
[30:39] KT: I will also get paid out for any unused accrued
[30:43] KT: vacation and sick time when I retire. At this moment
[30:47] KT: I anticipate that to be about $9,000. Is this considered
[30:53] KT: earned income? I'd like to maximize my Roth contribution in
[30:58] KT: 2027 despite retiring.
[31:01] KT: So she has two questions. What does she do with
[31:04] KT: the money from the income of her home?
[31:07] Suze: Well, here's what concerns me. She says the money we
[31:11] Suze: make from the sale of our home will be our
[31:14] Suze: budget for our next home. Just take into consideration here
[31:19] Suze: that if you have a home that you put on
[31:21] Suze: the market for 635, chances are you're the one who's
[31:26] Suze: gonna have to pay the 6% commission or
[31:29] Suze: so, to sell the house, which will be about $38,100
[31:35] Suze: so you're only going to have $596,900 for a new home.
[31:42] Suze: Just make sure that you have everything correct to know
[31:47] Suze: what you can really afford. You're going to do this
[31:50] Suze: in two to six months or so.
[31:53] Suze: You need to keep that money safe and sound, so
[31:56] Suze: put it in the highest yielding money market account, insured account, treasuries, liquid,
[32:03] Suze: everything liquid, so that when you find something, you can
[32:06] Suze: get it right away. You are not to invest this
[32:09] Suze: money in the stock market or anything else. Do you
[32:12] Suze: hear me? As far as you getting paid for any
[32:16] Suze: unused accrued vacation and sick time when you retire, guess what?
[32:22] Suze: That will count as earned income and because you are
[32:26] Suze: retiring in '27 early, as long as you have earned
[32:31] Suze: income in '27, and that's when you take it, you'll
[32:35] Suze: be fine. It will be counted as earned income. Give
[32:38] Suze: me one more, KT.
[32:40] KT: OK, this is another mortgage question, a good one.
[32:43] KT: My question, this is from Elaine. She said, Suze, my
[32:46] KT: question is I am 70 years old and I have
[32:48] KT: a mortgage of $97,000. If I pay it off now,
[32:54] KT: it will be a payoff of $55,000. I may move,
[32:58] KT: but it is not necessary. My monthly mortgage payment is $634.
[33:05] KT: If I use cash, I reduce my interest by $1,330
[33:11] KT: a year.
[33:13] KT: I just need a thought on this.
[33:16] Suze: Well, let me give you my thought. I wish I
[33:18] Suze: knew for sure that the $634 of your mortgage payment
[33:22] Suze: is simply for a mortgage payment and not including your
[33:27] Suze: property taxes and insurance, but I'm just going to assume
[33:31] Suze: that it is. If it were me, think about this
[33:35] Suze: right now.
[33:36] Suze: Now you're talking about $50,000 that generates for you $11,330
[33:43] Suze: a year in interest while that $50,000 in the mortgage
[33:50] Suze: makes you pay $634 a month for 12 months, which
[33:54] Suze: is approximately $7,582.
[33:59] Suze: Even if you took that $7,582 that you wouldn't be
[34:03] Suze: spending a year, you took away the $1,330 of interest
[34:08] Suze: that you make on that money, you are still looking
[34:11] Suze: at $6,252 more in your pocket or an additional $523
[34:19] Suze: per month. So if it were me.
[34:22] Suze: That's what I would do. So how was that, your Sunday?
[34:27] KT: I liked it. It's nice.
[34:29] Suze: Did you like it or love it?
[34:30] KT: I loved it. I love being with you on Sunday.
[34:35] KT: I feel like it's almost like a we're playing. It's nice.
[34:38] Suze: And it feels different than Thursday?
[34:40] KT: Totally different.
[34:42] Suze: Oh, that's great.
[34:44] KT: Really nice. I'm much more relaxed. I feel like it's
[34:47] KT: the weekend. I'm much more relaxed. I get very nervous
[34:51] KT: that we make Thursday perfect.
[34:54] KT: But Sunday, Sunday...
[34:56] Suze: Sunday, you don't care what we do on Sunday.
[34:58] KT: We can have, we can tell jokes. We can have
[35:00] KT: a little more fun.
[35:01] Suze: All right, everybody, I hope you are excited as us
[35:05] Suze: for our news. And so until next Sunday, there's only
[35:09] Suze: one thing that we want you to remember, and what
[35:11] Suze: is that, Miss. Travis?
[35:13] KT: Happy July 4th.
[35:15] Suze: Oh Jesus. All right, everybody, people first, then money, then things.
[35:20] Suze: Now you stay safe.
[35:22] KT: Happy birthday, America.
[35:24] Suze: Oh, she's so sweet, isn't she?

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