.
September 30th, 2008
06:12 PM ET

Suze Orman Takes your questions

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/09/30/art.vert.suzeorman.jpg width=292 height=320]

Program Note: Suze Orman will be on AC360° tonight at 10pm ET to discuss how to keep your money safe.

 
 

Have questions about how the breaking news will change the market; affect your stocks, mutual funds, 401(k)... your job?

Submit your financial questions here for Suze Orman and watch AC 360’ tonight 10p ET to get them answered.


Filed under: Bailout Turmoil • Suze Orman • T1
soundoff (221 Responses)
  1. maia simon

    You and CNN have done a good job of explaining how the REAL problem is the credit markets, but I still don't understand how buying mortgage backed securities and derivatives from investment banks will unfreeze the credit markets.
    Thank you,

    September 30, 2008 at 3:25 pm |
  2. Sandy

    I have heard the FDIC is starting to run out of funds. If this happens who pays for our guaranteed insurance up to $100,000 if our financial institution goes under???? I am sure its not a bottomless pit.....This is starting to make me nervous. Thanks, Sandy

    September 30, 2008 at 3:22 pm |
  3. suzanne hernandez

    If the market moves in a down ward direction like it did on Monday, September 29 do you think the government will temporarly halt trading on the US stock exchange. If so would this have a positive or negative affect on the over all financial situation? Thank you

    September 30, 2008 at 3:21 pm |
  4. JG, Texas

    Last year, I sensed things were not right after American Home Mortgage failed, so I re-allocated my 401k to 1/4 Money Market and the rest in several very conservative mutual funds that focused on asset protection. On Sept 23, I moved everything to Money Market. This appears to have worked for me so far, as I have lost little Year to Date, and none since last week. What do you think of this strategy? Is this a safe place to keep my money until markets return to normal (possibly years from now?)

    September 30, 2008 at 3:18 pm |
  5. Jon - Melbourne, FL

    Hi Suze!

    I am wondering...I am 28 with no credit card or student loan debt, my condo is paid off, I have a great job and am putting some money away in my 401k. Should I be taking advantage of the "great bargains" that you discussed in your article on the 360 website yesterday? If so, how much is too much to invest in this market?

    Thanks for coming and helping us through this Suze!!

    September 30, 2008 at 3:17 pm |
  6. Stephan Otto

    Hi Suze,

    I hear talk that personal credit lines may become the victims of this crisis, with credit card companies slashing my credit limits and my bank cutting my home equity line.

    My question to you, is that if this is actually a strong possibility, should I seriously consider pulling some money out of my home equity line right now to set aside in a savings account, in case my home equity line soon ceases to exist? I realize that I would be accruing interest on this withdrawal and have to make payments, however, I would feel more comfortable knowing that at least I had access to these funds if I needed them.

    September 30, 2008 at 3:16 pm |
  7. Brenda Hollywood, California

    I have an adjustable rate mortgage that will adjust in 2010. I now owe more than my home is worth. Will it be possible for me to re-finance to a fixed rate mortgage? My credit is good (always pay on-time and more than the min), but I am close to the top of my credit cards.

    September 30, 2008 at 3:12 pm |
  8. JustinTime

    I have excellent credit. Given the current economic situation, how long should I wait to purchase a new home? I'm worried that if I purchase a $150,000 home now, it may only be worth $90,000 when 2009 rings in. Warner Robins GA, 31095.

    September 30, 2008 at 3:11 pm |
  9. Ron Illinois

    Suze would be a great treasury secretary except for one thing.

    She believes in honesty and paying her bills. Most Americans don't have that same philosophy.

    I want what I want and I want it now. I probably won't pay for it though.

    September 30, 2008 at 3:08 pm |
  10. Terry Rich

    Hi Suze,

    A few weeks ago, I had $70K in my 401k. Today it has diminished to $53K. I have a home equity loan of $38K and was hoping my 401k would pay that off if there was ever a problem. Now I am terrified that my 401k will be gone and the bank will call in the home equity loan.

    I want to take my money out of the 401k immediately and I temporarily
    stopped further contributions.

    I realize I have made some mistakes but I hope you can offer some advice.

    Thank you. I love to listen to you. You make so much sense.

    September 30, 2008 at 3:07 pm |
  11. larry

    Hello Suze;

    When you say that the financial crisis we are currently in began in 2000. Is that when President Bush was in office or was President Clinton still the sitting president?

    Was there any pressure from Barack Obama, Barney Frank, President Clinton, and the organization with the acronym ACORN against Fanny & Freddie to provide mortgages to people who would have otherwise been rejected?

    September 30, 2008 at 3:05 pm |
  12. MICHAEL BOLDEN

    HI SUSIE,
    CURRENTLY I,M IN MY COMPANYS 401K PLAN, AND ALL MY INVESTMENTS ARE IN S&P 500, I'VE BEEN WITH THE COMPANY FOR 22 YEARS. I,M CURRENTLY 62 YEARS OLD AND PLAN TO RETIRE IN THREE MORE YEARS, THE HIGHEST MY INVESTMENTS HAVE BEEN IS 168,000, NOW THERE DOWN AROUND 140,000. I CURRENTLY INVEST 10% A WEEK AND THEY MATCH 4%, SHOULD I JUST PUT IN 4% AND WHAT SHOULD I DO WITH MY 401K NOW TO BE SAFE SO I DO NOT LOOSE ANYMORE OF MY MONEY? HOPE YOU CAN HELP WITH THIS! THANKS MW BOLDEN

    September 30, 2008 at 3:05 pm |
  13. Jennifer

    I have an 84-yr old Mother who has all her retirement investments in mutual funds via Merrill Lynch. Taking safety first, I've advised that she cash in everything now and not wait to "see what happens". These investments are all she has to live on in future years. Am I right that she should bail out now....and at her age, how significant would the taxes/penalties be?
    Thank you!
    Jennifer

    September 30, 2008 at 3:02 pm |
  14. GF, Los Angeles

    I'm told to leave money and put in the maximum into a 401K because eventually when I retire in 40 years – the money would be there because the market trends correct itself. How true is that in light of what's happened for those who are retiring now? I currently do not put all my money into a 401K and would rather save it in various savings accounts. What else can I do to save outside of a 401K or IRA?

    September 30, 2008 at 3:00 pm |
  15. Byron in Utah

    Suze, what is your take on this idea as to dealing with people who are facing financial despair and are in danger of losing their home to foreclosure due to the current economy?

    Take two types of homes:
    a) Homes that have already been foreclosed
    b) Homes headed for certain foreclosure

    A new government regulated process, with accountability and transparency, oversees the transference of a current homeowner facing foreclosure into a smaller home that is vacant due to foreclosure. This would be done only if both parties are in agreement. The homeowner’s equities would be transferred accordingly to this foreclosed property. However, said property would have to be re-appraised to current values. The homeowner would have to be re-qualified based on their abilities to meet their current debt load and the new loan payment on said foreclosed property.

    The new loan should be a (proposed) 30 year loan equivalent to the current interest rate (approximately 6%), but should be fixed so there can be no surprises later. No ARMS! This allows the current homeowners to retain their credit, their assets, and their will to continue making payments on all of their debts. The loaning institutions would benefit by slowing down this tremendous foreclosure rate and by eliminating some of their foreclosed properties as well as freeing up loaning monies.

    This would bolster the economy in many ways. Debtors would continue to make good on their current debts and loaning institutions would be able to continue to make new loans. Maybe with this change and a few others this $700 billion bail out would not be so large or as necessary. The tax payers would be freed from incurring this burden and our economy might be able to rebound.
    Thank you, Byron

    September 30, 2008 at 2:57 pm |
  16. Cindy Jorgensen

    My annuity is 193,000.00 I take 1800.00 out a month with 200.00 to go to taxes. I realize I can no longer do thsi with the volitile marke. I make $38,900.00 gross a year. I pay $915 (this includes property taxes each month towards my mortgage. I am 59 1/2 years old in April. Am I better taking it all out now, putting it somewhere safe.??? The annuity would pay $1755.00 a month at 59 1/2 and $2467.00 in 2014.

    September 30, 2008 at 2:56 pm |
  17. Raj Bala

    I have had a house on the market for almost a year now and there is a potential buyer who wants owner financing. Given the credit freeze, should I consider this route?

    September 30, 2008 at 2:54 pm |
  18. Jennifer - Michigan

    Hi Suze, I’m worried about my tax-deferred 12yr. Fixed Indexed annuity linked to the S&P – however it does have a safety net 3% minimum guarantee. Was it a huge mistake to buy into this? (bought-2004) It looks like it is not insured with the SIPC – what if they go bankrupt? Huge mistake? After 12 yrs I can reinvest into a different annuity. What do you think is best? I won't need the money until retirement – 20+ yrs.

    September 30, 2008 at 2:52 pm |
  19. deb

    Why can't this crisis be possibly dealt with from the wealthiest individuals from around the world? For example, at least 25 people on the Forbes 400 list are worth between 57 -25 billion dollars. Why can't these individuals invest their money with some kind of tax break for them for so many years, or for them to earn a decent rate of return on interest? You mean to tell me we can't find billionaires/millionaires just waiting to make another buck? If their going to make money on the investment, why not do it? Gosh, they would be making history, by hopefully, preventing another depression, is that not priceless in and of itself?

    September 30, 2008 at 2:51 pm |
  20. Michelle Mitchell

    Dear Suze:
    I recently returned from the private sector back to the federal govt. Now, I have a little less than $5k in a 401K (Fidelity) with my former employer & about half of that amount in a previous TSP account I established with the Feds before leaving. I also have a credit card with Barclays with a balance of $4k at 17.99%.

    I want to know if I should do a “direct rollover” to TSP or cash out, take tax penalty and pay off/down credit card and just start saving from the balance already in my TSP. I am 32.

    Thanks in advance.
    PS. I am a save yourself member & continue to contribute monthly.

    September 30, 2008 at 2:51 pm |
  21. Nooshin

    Would you please explain how banks will try to modify loans. do we have to be in default to be modified or not? I have a hard time to pay my monthly, some say i have to be in default till bank listen and some say no. Would you please clarify it for me. My bank is WAMU.

    Thanks,
    Nooshin

    September 30, 2008 at 2:50 pm |
  22. mary

    Is this the time to add to a 401K? I am in my early 50's and spent every cent raising my kids. Now that they are out on their own, I knew it was past time to start saving for me. But am I better off with just a savings account – at least I won't lose money!

    September 30, 2008 at 2:49 pm |
  23. dracine

    Suze,

    My wife and I work full time for academic institutions and are currently in graduate programs that we are financing with federal loans. Is there a chance there will not be enough money for the government to loan to people pursuing higher education?

    David and Avery
    Kingston, PA

    September 30, 2008 at 2:49 pm |
  24. Lilibeth

    Hi Suze, my question is:

    I have 20+ years before retirement. My portfolio is 65% stocks, 35% bonds. You said that you can’t time the market, and with 20+ years before retirement, I should be able to ride out the turmoil in the markets. However, I’m still concerned. I’m thinking about changing my allocations of future contributions to 50% money market funds and 50% index funds. Then be more aggressive later on when the market starts to pick up again. (I wish I can invest in municipal bonds like you have advised, but my current 401K plan doesn’t offer it). I will not touch the allocations in what’s currently in the plan now.

    What do you think?

    Thanks,

    Lilibeth
    Edmonds, Washington

    September 30, 2008 at 2:48 pm |
  25. Alex Geourntas, Boston, MA

    Why should Washington bail out the "fat cats" and corporations that got us into this mess in the first place on the backs of the taxpayer?

    What about helping the working family who struggles with savings, mortgage payments, insurance costs, paying grocery bills, filling up our gas tanks and now, paying for sky high heating bills? No help for the ordinary American! The rich get richer and the poor get poorer!

    Our so-called leaders in Washington are more concerned about their re-election than the financial well being of this country! Throw the bums out!!!!!!!!!!!!!!!!!!!!!

    What is your take on this Suze?

    Thanks

    Alex Geourntas

    September 30, 2008 at 2:47 pm |
  26. Adoma

    Suzy,

    I do not have a sub-prime mortgage. My credit rating is good. I thought about refinancing my home to pay off credit card debt. Are interest rates going down? If so Is now a good time to refinance?

    September 30, 2008 at 2:47 pm |
  27. Kathy O'Brien

    My husband is ready to pull the plug on our investments.He says he could put everything in a CD and get a 4% return....what do I tell him?? It's hard to say stay in the market when we're down 10% as of now...I feel we are diversified and should just stay put...HELP !!!!!!

    September 30, 2008 at 2:47 pm |
  28. Leslie

    Suze,

    I am Ms. American Middle Class- pay my bills on time, own an average home with a mortgage, married and we both work, contribute to our 401K, pay for our daughter to go to college etc. Instead of a bailout of irresponsible companies and irresponsible shoppers, how about giving us "good guys" a free mortgage payment- we would do more to stimulate the economy than a bailout-

    The congress and media say the bailout is so the average American can get credit- I get offers for new credit cards every day, and advertisements for easy car financing- the congress and media are doing a lousy job explaining why we need the bailout, or they're out of touch with the average American's daily lives.....

    Thanks!

    September 30, 2008 at 2:45 pm |
  29. D. A. Reuter, Bremerton, WA

    Suze,

    Two questions:

    1. I have lupus and I want know how someone with an incurable, potentially life threatening condition is suppose to invest?

    2. I work for civil service and we have the Thrift Savings Plan. Do you have any advice on what funds to select?

    September 30, 2008 at 2:44 pm |
  30. Willis Shalita

    I have $51,000 in a 457 Plan and contribute $1,200 a month. In light of this financial meltdown, should I continue to contribute ? I plan to retire in 4 years at 62.

    September 30, 2008 at 2:44 pm |
  31. Nancy from Boise

    Here is how (with near-perfect credit) this crisis is affecting me and my husband. Although we have no late fees, collection accounts, or liens against us, we have both been receiving letters from our credit card companies that indicate that our limits have been lowered. What this does, for those of you who don't know, is re-calculates how close you are to your maximum limit and affects your FICO and other credit scores. THAT DOES affect those of us who need a new car, have kids going off to college and may need a home equity loan etc. What I want to know is this... how is this bailout going to help those of us who did nothing wrong in our responsibilities, regain some ground in our credit scores and borrowing abilities? We know credit is like the gas crisis.. have a disaster and prices go way up and fast... have good news, and it is SLOW to respond. I can't see our credit card companies doing an about face on our loan limits and credit scores anytime in the near future!

    September 30, 2008 at 2:41 pm |
  32. Julie

    It is a total mistake to take out my husband's $70,000 401k to pay off our credit cards – we have 3 kids in college and have racked up debt which now hurts! We want to start over and WON'T do it again! I have around $100,000 in my 401k which will stay put.

    September 30, 2008 at 2:41 pm |
  33. Jay

    Susie,

    I am 53 yr old but do not expect to retire until 65-67. I am currently contributing 15% of pay to Vanguard 2020 and my company match is 4.00%. I have no credit card debt and own my home. I also have six months of salary in ING savings.

    My question is should I be moving a portion of my current funds, $140,000, into a trust account that is a safer investment but it provides very little return or start a Roth IRA.

    September 30, 2008 at 2:40 pm |
  34. Rick

    I have a 401K at work with what was 250,000 at the beginning of the year. It now is down by 27%. I'm just a few months shy of 60, and plan to work another 6 years. My house will be paid off in three years, and it was valued at 280,000 at the beginning of the year.

    Our combined annual income is about 160,000. We have two car payments totaling 550, and about 4,000 in credit card debt (aggresively working to eliminate).

    I am still contributing to my 401K up to the company match, in a fund called Pimco Real Return. It's the only fund that I have that is in the green for the year.
    These are the funds that my money is distributed in:
    Promark Lg Cap Index 19%
    Fidelity Emerg Mrkts 16%
    Fid Value 16%
    Fid Capital & Income 13%
    Fid Contrafund 8%
    Mid/Small Cap Index 7%
    Pyr Sm Cp Core Pool 6%
    Fid Growth & Income 6%
    Pimco Real Return 5%
    Fid Diversified Intl 4%

    QUESTION:
    Should I stay the course for now, or move my money out of this fund and into an Flexible Annuity Fund that is gauranteed a 7% return. Annuity cost is stated to be 3%.

    September 30, 2008 at 2:40 pm |
  35. Cindy

    Suze,
    I hear this that and the other from so many so called economists who are against this bail out. I think they are confusing the American people by getting on TV and saying that this bail out isn't needed. So in your mind if congress doesn't pass a bill then what do you think will really happen to our economy? A lot of these economists are saying that it won't be as bad as we think. But is that true? BTW..I don't put much faith in what they say since they aren't in congress and don't know all of the details but are just guessing.

    Cindy...Ga.

    September 30, 2008 at 2:38 pm |
  36. Rickie Gonzales

    I have a tax-sheltered annuity with AIG. Should I transfer funds (roll-over) or are they really safe?
    Thanks,
    A Worried Professor

    September 30, 2008 at 2:36 pm |
  37. Maureen / Newman, California

    If my bank closes, how quickly by law can I obtain my money?

    September 30, 2008 at 2:35 pm |
  38. Christine Mack

    Suze,
    I have a large sum of money invested with a Financial Planner. I know he has lied to me and stretched the truth. How do I hire a trustworthy Financial Planner. I don't suppose you are available? lol

    Christine Mack

    September 30, 2008 at 2:32 pm |
  39. Tim

    Hi Suze –

    I am 28 years old and getting married in December. I am almost maxed out on my credit cards with about 7k in credit card debt at 26%. I have called my c.c. companies asking for a lower interest rate. I also have another 9k or so in student loans. I pay the student loans each month and always pay atleast double the minimum on my monthly credit cards. I would say that my credit is average to slightly above average. I know, it used to be far worse.

    I put in 5% to my 401k every paycheck and my company matches that.

    My fiance's credit is great.

    The high likeliness is that probably within a year or so we will want to take advantage of the housing market and look to buy something.

    In your opininion, at this point given the situation with Wall Street, do you think I would be smart to borrow against my 401K, which isn't doing much for me these days, to pay off my credit card debt and help build my credit a bit more? Or, do you think borrowing against my 401k is poor decision which could ultimately harm my credit more than help it?

    I plan on continuing to pat the minimums on my low interest consolidated student loans.

    Obviously, I know that my fiance' and I will both need to have great credit in order to secure the best mortgage given the way things are right now.

    Thanks,

    Tim
    New York, NY

    September 30, 2008 at 2:30 pm |
  40. Jackie Carson

    Is this a good time for me to refinance and renovate my kitchen

    September 30, 2008 at 2:27 pm |
  41. Michael, Greenville NC

    Suze,
    first, I just want to say that you are great, and I enjoyed you on the show last night!
    I am a college student, my parents are paying for my college, and I am looking for a reliable market to put my money in. I have much of it in relatively stable stock, but should I take it out of the market and put it in the bank? I want to get some interest, but not put it at risk either...any suggestions?

    September 30, 2008 at 2:26 pm |
  42. Heather

    Suse,

    My husband and I have made very poor financial decisions in the past, but we are now taking classes facilitated by Dave Ramsey to learn how to become debt free. We own our own home and we got it at a good price so we are not in over our head there. We have about $1000 in credit card debt and no savings, but we have spent money faster than we could make it in the past. We are committed to changing those habits now and began that commitment before the stock market crashed.

    With the current state of the economy, is it too late for us to get it together?

    September 30, 2008 at 2:23 pm |
  43. Chris

    Hi Suze,

    I'm 28 years old, recently paid off all my old debt and my fiance and I closed on our first home at the beginning of September. I currently pay into a 401k that my employer matches. I've been wondering though, should look into purchasing some stocks for more of a short term gain (looking at about a 10 year return) while the market is at it's current level? And if so, what sort of stocks should I be looking at?

    Thank you,

    Chris from Long Island

    September 30, 2008 at 2:19 pm |
  44. Rene'

    ******ANNUITIES******
    I have funds in an ING Annuity that is above what the state will insure.
    The State of CA only insures the lesser of 80% or $100. To this point it has given me a good return. Should I move these funds at an 8% penalty???

    September 30, 2008 at 2:19 pm |
  45. Tonaka

    In light of the economic crisis, I am very concerned for my parents, who are both receiving social security benefits. In a worse case scenerio, would they continue to receive these benefits?

    September 30, 2008 at 2:18 pm |
  46. carol

    Suzie: thank you for your knowledge. we are a couple who are in our 50's. Had a mutual fund portfolio. We took it all out and put it into our state and local govt. Municipal Bonds. Per our financial advisor's advise. Theya re safe, tax free allthe way and will not be lost in the wall street shuffle. We think we did a good thing to protect our money, what do you think. We live in Fla., our mortgage is 200 a month, 15 years left, a safe mortgage and we read the fine lines. have had it for 15 years. we live within our means as we are both disabled.

    thank you

    September 30, 2008 at 2:17 pm |
  47. R. L. Eshleman

    Help me understand

    The American Taxpayer is being asked to put up a huge amount of money to prop up financial institutions who have lent too much money to too many people who cannot pay them back. The reason given is to avoid a credit “freeze-up” that would make it harder for people to borrow money. If people cannot borrow money, then they will not spend it and our economy will slow down.

    True enough, but this crisis is exactly caused by us making too much money available to people who should not be borrowing it in the first place, all in the name of keeping our economy going. So, are we not just putting another band aid on the pig? Eventually, our economy will have to be built on creating value rather than borrowing it. Why not start now and avoid and even bigger crash later?

    Richard,

    Ohio

    September 30, 2008 at 2:15 pm |
  48. Sue, Billerica, MA

    p.s. And we have laws to prevent monopolies, how come we don't have laws to prevent any one or few businesses from being so crucial to the stability of our economy???? And how can the system be changed including what kind of laws could be passed to prevent something like this from happening again?

    September 30, 2008 at 2:13 pm |
  49. Sue, Billerica, MA

    Hi Suze,

    How much of the crash this week do you think was due to the actual crisis versus how much was due to Bush's gloom and doom panic address to the nation and all the politicians and pundits following suit? Doesn't the rebound today show that some of it was pure panic?

    Thanks,
    Sue

    September 30, 2008 at 2:11 pm |
  50. Phyllis

    I have a 401A – 100% is in Guaranteed pooled fund. The company is BENCOR. I believe they are under Transamerica. Can I move this to an IRA if I am still employed?

    September 30, 2008 at 2:08 pm |
1 2 3 4 5