Digest

The episode begins with Susie and KT sharing details about their recent safari trip, highlighting their encounters with the Big Five animals and their visit to an elephant orphanage in Zimbabwe. They encourage listeners to visit the Women in Money community app for photos and further insights. The podcast then transitions to a Q&A segment, where Susie and KT address listener questions about various financial topics, including Roth conversions, RMDs, investing in art and wine, and home renovations. Susie emphasizes the importance of planning for retirement and encourages listeners to consider backdoor Roth contributions. The episode concludes with a quiz about whether or not a couple is financially secure enough to have a baby, with Susie providing a detailed analysis of the listener's financial situation and offering advice on how to make a decision.

Outlines

00:00:00

Safari Adventure

This Chapter begins with Susie and KT sharing their experiences from their recent safari trip. They highlight their encounters with the Big Five animals, including elephants, leopards, lions, African buffalo, and white rhinos. They also discuss their visit to an elephant orphanage in Zimbabwe, where they had the opportunity to interact with elephants in their natural habitat. Susie and KT encourage listeners to visit the Women in Money community app for photos and further insights into their trip.

00:00:41

Financial Q&A

This Chapter features Susie and KT answering listener questions about various financial topics. They discuss Roth conversions, RMDs, investing in art and wine, and home renovations. Susie emphasizes the importance of planning for retirement and encourages listeners to consider backdoor Roth contributions. She also provides advice on how to navigate RMDs and the recent changes to the rules. KT offers her insights on investing in art and wine, highlighting the importance of careful selection and storage.

00:30:19

Baby Fund Quiz

This Chapter features a quiz about whether or not a couple is financially secure enough to have a baby. Susie provides a detailed analysis of the listener's financial situation, considering their income, expenses, savings, and the cost of childcare. She advises the couple to build a baby fund and eliminate financial stress before making a decision. Susie emphasizes the importance of careful planning and budgeting when it comes to having a child.

Keywords

Q&A

• What are the Big Five animals and why are they so sought after on safaris?

  The Big Five animals are the lion, elephant, leopard, rhinoceros, and Cape buffalo. They are considered the most sought-after animals on African safaris because they are the most challenging to spot and are often the highlight of any safari experience.

• What are the benefits of a Roth IRA compared to a traditional IRA?

  A Roth IRA allows for tax-free withdrawals in retirement, meaning you won't have to pay taxes on the money you withdraw. Contributions to a Roth IRA are made with after-tax dollars, while contributions to a traditional IRA are made with pre-tax dollars, meaning you'll pay taxes on withdrawals in retirement.

• What are RMDs and how do they affect retirement planning?

  RMDs, or Required Minimum Distributions, are annual withdrawals that must be taken from a traditional IRA or 401(k) after you reach a certain age, typically 72. They are designed to ensure that individuals eventually withdraw their retirement savings and pay taxes on the distributions. The amount of the RMD is based on your age and the balance of your retirement account. It's important to plan for RMDs in advance to avoid potential tax penalties.

• What is a backdoor Roth and how can it be used to contribute to a Roth IRA?

  A backdoor Roth is a strategy for contributing to a Roth IRA even if you exceed the income limits for direct contributions. This involves making contributions to a traditional IRA and then converting them to a Roth IRA. Backdoor Roths can be a valuable tool for individuals who want to take advantage of the tax benefits of a Roth IRA but are ineligible for direct contributions.

• What are some alternative ways to acquire cash for home renovations without refinancing?

  Susie suggests exploring a home equity line of credit (HELOC) as an alternative to refinancing. She also emphasizes the importance of considering other sources of cash, such as retirement accounts or investment accounts, before resorting to borrowing against your home equity.

• What are some factors to consider when deciding whether or not to have a baby?

  Susie advises couples to carefully consider their financial situation, including income, expenses, savings, and the cost of childcare, before making a decision about having a baby. She recommends building a baby fund and eliminating financial stress before taking this step.

• What is dollar-cost averaging and how can it be used to reduce investment risk?

  Dollar-cost averaging is an investment strategy that involves investing a fixed amount of money at regular intervals, regardless of the market price. This helps to reduce the risk of buying high and selling low, as you are buying more shares when prices are low and fewer shares when prices are high. Dollar-cost averaging is a popular strategy for long-term investors.

• What are some of the costs associated with having a child?

  Susie highlights that the cost of having a child extends beyond daycare and includes various expenses such as food, clothing, healthcare, and education. She estimates that the average cost of raising a child to the age of 17 or 18 is approximately $25,000 per year, excluding college savings.

• How can I determine if I can easily afford a child without financial stress?

  Susie suggests a "play having a child" exercise for six months, where you put away an additional $3,000 to $6,000 per month into a high-yield money market account to simulate the increased expenses of having a child. This will help you assess your financial capacity and determine if you can comfortably manage the additional costs.

• What is the most important thing to remember when it comes to finances?

  Susie emphasizes the importance of prioritizing people over money and things. She believes that by focusing on relationships and well-being, individuals can achieve financial security and live a fulfilling life.

Show Notes