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CNN LARRY KING LIVE

Interview With Suze Orman

Aired January 2, 2008 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEO CLIP)
SUZE ORMAN: Please, give me a (INAUDIBLE).

(END VIDEO CLIP)

LARRY KING, HOST: Tonight, will 2008 bring bigger and better numbers for your bottom line or are hard times on the horizon?

Personal finance guru Suze Orman says you're wise if you're worried. She's here and she's ready to help you save yourself and protect your economic future.

And, on the eve of the Iowa caucuses, she'll tell us if presidential politics will have any real impact on our pocketbooks.

Who does she like?

Suze Orman for the hour, taking your calls and e-mail questions, next on LARRY KING LIVE.

Good evening.

Last February on this program, Suze Orman introduced the book "Women & Money". That book is now 40,000 shy of a million sold. And in a week, "Las mujeres y el dinero" will come out. That's the Spanish version of this book. That's a kind of a first. Most Spanish versions are published in Spanish-speaking countries.

Suze Orman is our guest.

We'll be fitting in your calls, your e-mails and lots of people asking questions on the street, as well. We're also get Suze's look at the election tomorrow in Iowa and what effect it might have.

Before we get to any of that, every time you come on, the stock market dives.

ORMAN: Every...

KING: You're an indication, right?

ORMAN: Every single time.

KING: Today it went down 220.

Why? ORMAN: Well, you know, you're having all these problems in Nigeria, in Kenya with their elections. You're having oil at all time highs. You're having inflation -- do we have it, do we not?

We have everybody afraid that maybe we're going into a recession. And we still have this credit crisis. So we've actually picked up where we left off at the end of this year last year, where the market isn't that stable.

KING: No surprise then?

ORMAN: No surprise. And, in fact, it should probably continue. The first few weeks here, we're not heading -- this isn't a great market.

KING: All right.

What effect will Iowa have on the market, on the economy?

ORMAN: Look it, I am a personal financial expert. So what I care about is your pocketbook, your economy.

What effect is the presidential election going to have on your personal pocketbook?

Would you be out a...

KING: That's what I asked you.

ORMAN: That's a good question.

Will you be out of credit card debt?

Well, I don't think it's going to have any at all.

Does it have an effect on the major overall economy?

Possibly. But for the individuals, I am so sorry to say that I don't see government at all affecting the average person on the street -- be it big business, um-hmm. Energy, um-hmm.

But is government controlling that, or, Larry, is big business controlling government?

KING: You're not saying that Herbert Hoover had no effect on the Depression?

ORMAN: No, but here we are many years later. And, listen, again, before we started tonight, what was I talking to you about?

I said did you go see "Charlie Wilson's War?"

You said you loved that movie. I loved that movie, too.

KING: I loved it. ORMAN: And what I found so fascinating about that movie is in the cold war, the largest covert activity we have ever had in the United States of America -- at least throughout the movie -- there was no presence of the president of the United States of America at all. The third rate Congressman, who used to come on your radio show, created this whole thing where the United States of America runs the largest covert war ever.

So I have to tell you, this presidential whole thing is just boring me.

KING: Is any person running tomorrow -- does any person running tomorrow jump out at you?

ORMAN: I like a lot what I'm seeing with Barack Obama. I am liking that very much. I happen to believe, when I look at things, that people's behavior with money -- they don't really change when you give them an incentive to do something. They change when you force them to change, when it comes to money -- or when they get in such a horrific state of affairs that they're forced to change.

So a lot of the things that he's coming up with, I'm actually liking.

But, on the other hand, I actually like Hillary very much.

Either one of those two -- to tell you the truth -- for the Democratic side, if they won, I would be very happy.

KING: And the Republican side?

ORMAN: Republican, you know, it's hard. I'm confused there. If I were going to go anywhere there, I personally like Giuliani a lot. But maybe it's because I just like...

KING: There's nothing wrong with that.

ORMAN: Nothing wrong with him. And I actually -- and people are going to think I've really lost it here -- on the Republican side, I like McCain, because at least I know what he's talking about.

KING: Giuliani will be one of the people with us tomorrow night when we're on at 9:00 Pacific...

ORMAN: Yes. I like him a lot.

KING: ...following the...

ORMAN: Yes.

KING: OK, so does a person indicate by his talents, abilities what he might do for the economy?

Might Giuliani help the economy?

ORMAN: I think every president who ever wins will, of course, want to help the economy.

What president wouldn't want to help the economy?

Will they be able to help the economy?

Are they going to be able to do something to help this credit crisis?

No, they're not. Now, I know that they're out there talking all the time about they're going to increase the limits of borrowing for Fannie Mae and Freddie Mac. We're in trouble. And it's the people themselves, I think, Larry, that's going to have to help the economy. It's business. I'm going to go back to business again. It's business. It's energy. It's the oil companies. It's the mortgage companies.

KING: What are they supposed to do?

ORMAN: Well, first of all, do we have -- so we have oil up here.

Why is oil so high?

Nobody's been able to answer that.

Why is oil crossing the $100 mark?

Nobody has really...

KING: No, no one has ever answered it.

ORMAN: Nobody has answered it.

And I'm like oh, so, is government going to be able to answer it?

So where can business start to come in?

Where can the energy companies start to come in and possibly cut down on their profits, so that a gallon of a gasoline doesn't have to cost us $4 a gallon, which is really causing people a lot of heartache. That's hitting them where it hurts. They can't drive their cars anymore.

KING: So, Giuliani, McCain Obama, Clinton...

ORMAN: And Hillary.

KING: ...would all be fine for you?

ORMAN: Yes. Obviously, no there -- no bones about it, I want a Democrat to win.

KING: Now, why?

ORMAN: Yes...

KING: Historically, I thought Republicans helped the economy. ORMAN: Yes. But, you know, I'm more than just somebody for the economy. I'm somebody for the people. And I have a true belief that, you know, that Senator Clinton or Barack Obama -- Senator Obama -- would be more helpful.

KING: Do...

ORMAN: Especially for somebody like me. I mean it is -- it is no secret that, you know, I'm in a same sex relationship and have been for a long time. And I would like to see a president give the rights for somebody like me to be able to leave my partner all the money I've accumulated without estate tax. I...

KING: You can't do that now?

ORMAN: No, I can't do that at all. And nor can any person like that. So I want to hear -- I want to see somebody in office that at least can be a spokesperson for me, that says yes, you can have the exact same rights as everybody else.

KING: Can your partner have any say if you are in a grave health situation as to...

ORMAN: She can, but only because I put all the paperwork in place. And I have copies of that in place. If we didn't have that type of paperwork in place, good luck her even getting into the intensive care unit.

KING: That's a frustrating way to live, isn't it?

ORMAN: It's a real frustrating way to live, especially -- it's no secret, as well, that I'm a very successful woman. I've made a lot of money in my lifetime. And I should be able to leave that money -- as well as, K.T. my life partner, has also made a serious sum of money in her lifetime. Upon our deaths -- you die, you leave your wife billions of dollars. Let's just say you had that. She wouldn't have to pay one penny of estate tax on that. I leave anything over $2 million this year to K.T. estate tax is owed.

KING: Suze Orman is our guest.

A book out and a paperback version and in Spanish coming.

How much credit debt do you have?

That's the quick vote right now on our Web site, CNN.com/larryking.

We'll discuss the results with Suze in a little bit. But there's still time to vote -- CNN.com/larryking.

We'll be right back.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's no shortage of fireworks for this first full day of trading of the new year.

UNIDENTIFIED FEMALE: A sell-off right at the get go.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: We're back with Suze Orman on LARRY KING LIVE.

Let's take an e-mail question from Adriana in Silver Spring, Maryland: "I'm trying to clean up my credit and pay things off. I want to close store credit accounts as I pay them off. My friends say it'll hurt my credit score. What do I do?"

ORMAN: It depends how many credit cards you actually have. Again, we talk about this all the time right here on this show.

Here's what you have to remember. Your credit score, known as your FICO score, 30 percent of that is made up of something called your debt to credit limit ratio. When you chose down credit cards, you're closing down a credit limit. When you close down a credit limit, you're increasing your debt -- what you owe -- to your credit limit ratio. When the debt to credit limit ratio increases, your FICO score decreases, and that's what hurts you.

However, store credit cards -- those are credit carts with Macy's, Bloomingdales, places like that, I have to tell you, if you close those down versus Visa cards, MasterCards, American Express cards, those won't hurt your credit score as much, because those type of cards, to begin with, aren't good on your credit report.

So if I were you, close them down if they're card store...

KING: Wait a minute...

ORMAN: ...card store -- whatever.

KING: Close them down?

ORMAN: Close them down.

Is that bad?

ORMAN: Get it -- well, it depends what kind of debt you have.

KING: Some people use debt, right?

ORMAN: Some debt can -- you can leverage yourself with debt. But credit card debt -- credit card debt that's at a high interest rate is always, always bad.

KING: We have a King Cam question. These are cameras out on the street. Watch.

UNIDENTIFIED MALE: I purchased a home about seven years ago with my now ex-wife. And I spoke with my mortgage company last year to try to get my wife's name removed from the mortgage. And the company says that I have to refinance in order to remove her name. And I don't believe that -- that doesn't sound fair. So I wonder if there's a way around that?

ORMAN: It doesn't sound fair, does it?

So, sorry about that, boyfriend, because the truth of the matter is it doesn't matter whether something is fair or not, it is how it is. If you have two people's names on a loan and a lender extended credit to you because both of you signed for it -- which means if you can't pay for it, even if she's not living in that house, even if she is your ex-wife, they could come after her.

Why would they want you to be able to take her name off of that loan?

Because then if something happens to you, they have less -- one person to go after. So to get her name off of that loan, you are going to have to refinance in your name alone.

KING: Another e-mail from Roxann in Lake Worth, Florida: "During the past year, I reviewed my credit report and corrected my inaccuracies. I also paid all my bills on time and paid off my car loan. I'll be free of credit card debt this month. How soon should I see an improvement in my FICO score?"

ORMAN: Depends how low your FICO score was when all of this happened. You know, it usually takes somebody a good five years or so to ruin their FICO score, because they can kind of keep it going. You borrow from one credit card to pay another credit card. If your FICO score is in the 500, 600 area, it could take you another six months, one to two years to see your FICO score go back up to 700, which is where I would like to see you have a FICO score.

KING: What does FICO stand for?

ORMAN: FICO stands for Fair Isaac Corporation, the company that essentially created the credit score years and years ago.

KING: The holiday season, from a retail standpoint, was poor.

ORMAN: Yes. Good.

KING: Buyers weren't buying as much.

ORMAN: That's good.

KING: Is that good?

ORMAN: It's good for somebody like me because do you know how hard it is to do a show, tell people how to get themselves out of credit card debt and then comes December. And all of this advertising, all of this retail marketing gets to them. And before you know it, these people who struggled so hard to get out of credit card debt succumb to the pressure and in a matter of one or two days, they are in worse credit card debt than they were beforehand. So I like when I hear that people aren't getting themselves into credit card debt. For retail and the economy, again, not so good. For individuals, great.

KING: Doesn't having a lot of money make it really easy for you?

I mean you're not going to go broke.

ORMAN: No, no. I am not going to go broke. But you...

KING: You can buy that thing that maybe -- you don't even have to think about it, right?

ORMAN: No.

KING: Sometimes you don't ask the price.

ORMAN: That's right. I never do when I want something.

KING: Right. Go ahead.

ORMAN: That's absolutely correct.

But was it always that way?

No. What people have to remember about me is that I didn't grow up with money. I'm not going to inherit money I didn't marry money, obviously. And -- but the truth of the matter is I was still a waitress when I was 30 years of age, making $400 a month, having had been a waitress for seven years. So don't tell me that I don't know what it's like to have credit card debt. Of course I do. I know what it's like not to have any money to do anything with.

But I also know that every single person has the ability to say no, I can't afford it. They just don't want to. And, you know, when that starts to be where the person wants to say no -- because they need to say no now. We've had an economic switch.

KING: We'll be right back with Suze Orman -- more questions, more e-mails, more King Cams -- all ahead on LARRY KING LIVE.

Don't go away.

(COMMERCIAL BREAK)

KING: "Women & Money" approaching it's millionth sale. It started on this program last February and they have just published it in Spanish for consumption in the United States -- "Las mujeres y el dinero".

Our guest is Suze Dinero.

We haven't asked you about housing.

Getting better? ORMAN: No, it's not getting better. We said a long time ago that housing was in the doldrums, and it's going to be there for a long time. Vacancies are increasing. Inventory is increasing.

KING: How come Beverly Hills is jammed and Manhattan looks pretty good?

ORMAN: Well, right now, Manhattan looks pretty good.

Now, here's what's so funny, again. The United States exists between what?

New York and California. That's where the United States really is. It's unreal the prices in New York City, unreal here. So when you have money, does anything affect people with money?

Not really. So they get to buy something for maybe $1 million less. Where it affects people are people that don't have the money to pay their mortgage payment. However, as the economy gets worse and we start having layoffs -- Citigroup, when they layoff -- let's just say they layoff 5,000 or 10,000 people. Let's say they do it in New York City. Oh, you watch what happens to real estate in New York City at that time.

KING: Let's get another King Cam question for Suze Orman.

UNIDENTIFIED FEMALE: Hi, Suze. I'm wondering, financially, which is the best option. Should I put money aside to save for my children's education or my own retirement? If I can't do both, which one can I do, considering that students can get financial aid in other ways and I don't want my children to have to care for me in retirement?

ORMAN: Well, if you don't want your children to have to care for you in retirement, you'd better be putting money away for your retirement. What's...

KING: Over the children's education?

ORMAN: Of course, over your children's education, because here's the thing. Your kids can get a loan in order to go to school. Your kids can go to a community college if they don't have the money. There is nothing wrong with that. But if you don't have the money in retirement, who is going to pay for you?

You can't take a loan out. And with all -- you have all of these politics happening right now. All these candidates -- Social Security, Medicare, Medical -- big problems in the United States of America. The first baby boomers are starting to retire. We don't have the money for them.

So you'd better put it away for yourself, do you hear me?

KING: Ooh, you're tough.

ORMAN: Yes, I am. KING: We have an e-mail question from Jennifer of Fort Myers, Florida: "I have approximately $6,000 in revolving credit card debt. When I was a little tight with money, I made a few late payments. As a result, my interest rates are an outrageous 30 percent on all four of my cards. What should I do?"

ORMAN: The first thing you should do is you should check your FICO scores. If you have fico scores -- and you do that, by the way, by going to myFICO -- myFICO.com. One FICO score is $15.95. Just check one. You do have three, one for every credit bureau, but you don't need all three. Just check one.

If you have a FICO score that's 700 or above, you, then, can do what's called a balance transfer, where you take the money that's at 30 percent and transfer it to a credit card at a lot lower interest rate. That's what you can do.

KING: You can do this?

ORMAN: You can do that yourself. Or, if you have a high FICO score, you call your credit card company that you currently have and you demand that they lower your interest rates.

However, if you have a low FICO score, 500 area, 600 area, you're stuck. Therefore, your number one priority should be to pay off the credit card with that high interest rate as soon as you can, before you do anything else.

KING: Another e-mail from Wendy in Tamarack, Florida: "I have a Visa card with a $5,000 limit. I charged about $3,300 with fees and interest. I was owing $5,000. When I couldn't pay, they hired a law firm and sued me for almost $8,000. My trial date is in February. I don't have a lawyer. What do I do?"

ORMAN: Oh, my goodness. They...

KING: That's not small claims court is it?

ORMAN: That -- I guess that's not small claims court, because it's over $5,000. So, here you're going to have to show up. I would actually be calling them and asking them why, because they don't want to take you to court. They don't want to have to spend the money to sue you and do these things.

Can you at least call them and negotiate with them and ask why are they suing you?

Well, obviously, because you weren't paying it.

Can you negotiate with them so you can start paying it?

Because otherwise, you're going to end up in court. You're going to lose. Sure, maybe you don't have the money to pay them, but they will have the legal authority at that point to do one of two things -- possibly put a lien on your home, possibly even garnish your wages if you are working. On the other hand, if you don't have a job, you don't have a home, you don't have any money, they can sue you. If they win, they're still not going to get anything.

KING: A lot of these credit card companies -- are they, in a sense, charging what the mafia used to be arrested for?

ORMAN: Yes, they are. And they have legal authority to do so. If you miss one payment, you're late on a payment, they can raise you to the max which, as you just heard, can be 30 percent. Yes. Government -- can government -- that's big business again.

KING: Government could do something about that.

ORMAN: Government could do that. But this isn't something new, Larry. This isn't something new.

Why haven't all the administrations prior to this say you can't raise interest rates above this a point?

Please. Big business.

KING: What's the justification for that large an interest rate?

ORMAN: Because they feel once you are late in payments, that you are going to stop paying them. So they want to get the highest amount of interest on their money that they can...

KING: But if you're not going to pay, then what's the difference?

ORMAN: That's right, you see?

So they're kind of making it even worse. But they will hope that you'll at least pay the minimum. Maybe you won't even notice that you're paying 30 percent on your credit card. So at least they're making that interest on those that will pay it to make up for those that are going to claim bankruptcy or not pay it.

KING: Do too many people have credit cards?

ORMAN: No. Not too many people have credit cards. Too many people abuse their credit cards by charging more and more and more on their credit cards.

KING: So it's not the card?

ORMAN: It's not the card.

KING: It's the abuse of the card.

ORMAN: It's the abuse of the card and the fact that the credit card companies allow you to abuse the card. When you're in trouble, rather than closing down your credit limit, they expand your credit limit. So you're charged up to $5,000. No more credit limit. You call up. And in the good old days, a few -- a year or two ago, they would have given you $2,000 more of a credit limit, so you can now have $7,000 of credit.

KING: Go spend. ORMAN: And go spend. It's all backfired on them now.

KING: We'll take a break and we'll be right back.

By the way, tomorrow night, we'll be with you following the roundup of all of the results in Iowa. Bob Woodward will anchor our panel. Rudy Giuliani and others will be the guests. That will be midnight Eastern, 9:00 Pacific -- our roundup of what took place in Iowa on this very important Thursday.

Don't go away.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's the new year, but it's the same old fears. Stocks dropping more than 200 points.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: We're back with Suze Orman. The book, "Women & Money," introduced on this program last February, is approaching one million in print. And the Spanish version will be out in a week. Let's take a call. Greensboro, North Carolina. Hello.

CALLER: Hi, Larry. Hi, Suze. My husband and I purchased a home, actually built a home two 1/2 years old, and toxic mold was discovered in the house. We were told to walk away with the clothes on our backs. It's going to cost hundreds of thousands of dollars to rid the house of the mold. Insurance does not cover mold problems. We don't know what to do.

ORMAN: Oh, I know.

KING: The builder has no responsibility?

ORMAN: Was this a house you built, or did a builder --

CALLER: We built the house.

ORMAN: That's what I thought.

CALLER: We built the house.

ORMAN: When the house has mold, it is absolutely true that most insurance policies don't cover mold over like 5,000, maybe 50,000 dollars at most. If it's a really great policy, and it does, once mold is in a house, guess what, it is there and it is very difficult to get rid of.

KING: So she's screwed?

ORMAN: I don't want to use that word here, but you are going to have to walk away, I'm afraid.

KING: Good grief. Here's another King Cam question for Suze Orman. Life isn't easy. Go.

UNIDENTIFIED FEMALE: Hi, Suze, my name is Laura Adams. I was wondering if you think we're in a consumer-led recession, due to the housing market, and what your thoughts are on that?

UNIDENTIFIED MALE: Hi, I'm Darryl Smith. I'm just wondering, I have an investment in gold and collectible coins, and I wonder if I should hang on to it for a rise in gold?

KING: Two King Cams there.

ORMAN: Two King Cams. First of all, gold, yes, please hold on to it. For those of you wanting to investing into the gold market, buy gold itself. Don't buy these mining shares. I know today mining went up and it was OK. But if you're going to participate in the gold market, you're far better off buying gold, the exchanged traded fund GLD, if you're going to do that. Gold is very speculative. It can go up. It can go down. I would still hold it at this point in time.

As far as, are we into a homing -- because of homes, are we going to be in a recession? Well, I'm not sure we are going to be in a recession, truthfully. Are we coming close? Maybe. But I think we are going to pull this out. Do I still think that the housing market, especially in specific areas, has a way yet to go down? I do. It could last this entire year. It could last all the way into 2009, 2010.

But hopefully some time within 2008, latter half, it should hopefully start to turn around just a little bit.

KING: We have an e-mail question from Pam in Sydney, Nova Scotia; my oldest son will be graduating from the university this spring. He's debt free right now. What's the best financial advice for a young person just starting out?

ORMAN: Just starting out, he needs to do two things. He needs to start saving money for a down payment on a home. Just because houses -- the price of houses are down, doesn't mean that people should be buying homes, because now might be a time where you can get an absolute steal on a home. If he starts saving for a down payment on a home, in the long run, a home is the best investment anybody could ever make, over the long run.

Second, he should start putting money away today for his tomorrow. Chances are, he qualifies for a Roth I.R.A. If he can start putting money away in a Roth I.R.A. today, 5,000 dollars if you're under 50, 6,000 dollars if you're 50 or older, is the max. Those are new, as of 2008. He will be a multi, multi-millionaire by the time he is 65. Those are the two things I would have my kid doing.

KING: Put in 5,000 and how often?

ORMAN: Even if all he did was put in 200 dollars a month -- how old did she say he was? Let's say 27 years of age or just out of university. If he said, let's say, 22. He puts 200 dollars months away every single month for the next 40 years. He would have almost a million, two million dollars with the normal market returns.

That's 200 a month. However, if he waits until he's 32 of age -- he waits ten years to do it, he will have only 70 percent of that amount. He will have hardly anything in that account at that time, maybe 300,000, 400,000.

KING: E-mail question from Rick in Rice Lake, Wisconsin; which would be wiser, investing my tax return and work bonus, or using the money to help pay of my college debt, which is now 72,000 dollars over 30 years?

ORMAN: Your tax returns, you're getting a tax refund, what is that about, boyfriend? You shouldn't be getting a tax refund. Nobody should be getting a tax refund. Why? When you are getting a tax refund, you have lent the money government money interest free.

What you should be doing is increasing your exemption so they withhold less, so you don't get any money back at the end of the year. That gives you more money every single month in your paycheck. When you have more money in your paycheck, get rid of that student loan.

KING: Are you saying, if I'm really happy over my tax refund, I'm a jerk.

ORMAN: That's right.

KING: Because I didn't put enough exemptions down to keep more money?

ORMAN: That's right.

KING: The government has not paid any interest on that.

ORMAN: That's right. You're giving Uncle Sam an interest -- a loan interest free. You're taking this uncle thing too seriously. He's not related to you. He has nothing to do with you.

KING: But I like him!

ORMAN: You like him, but you wouldn't even give your own sons when they grow up a loan interest free, Larry. So it's ridiculous. People shouldn't be getting tax refunds.

KING: We will be right back with Suze Orman. She can be one tough lady. Don't go away.

(COMMERCIAL BREAK)

KING: We're back. How much credit card debt do you have? That's the quick vote on our website, CNN.com/LarryKing. Let's take a look at the results so far. Right now, 35 percent say they are debt free, 19 percent have less than 1,000 dollars of debt, and 21 percent have more than 10,000 in debt. What do you make of that?

ORMAN: Well, the people who watch your show are intelligent.

KING: Only thing I can make of it.

ORMAN: Because if you look, the truth of the matter is that the average American family today has 9,000 dollars of credit card debt at an average interest rate of 17.49 percent and that's increasing. So the 35 percent who are debt free, because they are watching your show or my show, but they are smart.

KING: Go, audience. Dubuque, Iowa, hello.

CALLER: I have a question for you. I have three different I.R.A.s, two of them are I.R.A.s, one is a 401. I have them in moderate-to-high category in stocks, and I wonder if I should go to a low-to-moderate category and put more in guaranteed, depending on the market for '08.

ORMAN: How old are you?

CALLER: I'm 43.

ORMAN: At 43, you have a good 20, 30 years before you need this money. Is that correct? So if you have that long, what I would be doing right now is I would be looking more towards large capitalization stocks, good, solid companies, rather than small caps, as to where I would be putting my money. The mistake, however, you're making, more than where you're putting your money, is you have three retirement accounts. You have two I.R.A.s. When you have two I.R.A.s, you're paying two custodial fees. You should be combing those two I.R.A.s into one I.R.A. and diversify within that one account there.

KING: Let's go to another couple of King Cams.

UNIDENTIFIED MALE: Hi, my name is Michael Garber. I was wondering if now is a good time to buy a house?

UNIDENTIFIED MALE: Hi, my name is Thomas Mariano. I want to ask you, how can I get rich?

ORMAN: You get rich day by day at a time, putting your money away and a little bit, obviously, creates a lot. Is it a good time to buy a house? It depends what area you happen to be living in, number one. But number two, is this a home that you want to call your own? Do I think now is a good time to be investing in real estate just to invest in real estate? No, not yet.

Is now a good time if you need to purchase a home for you to live in? Yes, now is a fine time, because now is the time that you can go out and you can get a steal. If you don't get a serious bargain, walk away. There are other houses out there you can make an offer on. If somebody is offering 200,000 dollars for a home, you make an offer of 100,000. You get a steal, you got a good buy. You don't get a steal, you wait until you do.

KING: An e-mail from Marietta in Knoxville, Tennessee; I'm going from full time employee to part time. Can I transfer my 401K to my husband's account? What should I do with it? ORMAN: Have you lost your mind? You don't want to transfer your 401K from your name to your husband's account, number one. Legally, you can't do that. Number two, you want to keep money in your own name. How do you know he's always going to be your husband.

KING: What's the problem in going to part time from full time?

ORMAN: There is none. It makes no difference. Maybe your new employer doesn't offer you a 401K plan because you happen to be part time. Who cares? Take your 401K from your old employer, do an I.R.A. rollover with it at some brokerage firm, so you can truly diversify that money. And what you should be able to do is open up a Roth I.R.A. in your own name or a traditional I.R.A., if you're making too much money for a Roth I.R.A., and just start putting money away there.

That's all you need to do. Forget about the 401Ks at your employer, if they won't let you participate.

KING: That was named for Senator Roth?

ORMAN: Yes, he was.

KING: An e-mail from Cleveland, Ohio; should a person invest in penny stock if they don't have a lot of money to invest with? If so, any you can recommend.

ORMAN: This one is simple. No, stay away from it. I would be very, very careful of ever buying a stock under 15 dollars a share. You have to really know what you're doing. You have pennies, you keep those pennies. Don't invest in penny stocks.

KING: We will take a break and we will be right back.

First let's check in with Anderson Cooper, who is in New York tonight, pre-election eve. What's up?

ANDERSON COOPER, CNN ANCHOR: Larry, coming up at the top of the hour on 360 a lot of politics. We are out of cliches, so here's what you need to know; the business of electing the next president of America begins in earnest tomorrow night. It would be an understatement to say the race is wide open for both parties. We are going to spend our time tonight looking live at some of the 11th hour pitches the leading candidates are making tonight at this hour.

And we will dig deeper on the issues, the real nuts and bolts concerns of Iowans and Americans, and where the candidates stand on those issues. We will also explain what the heck a caucus really is and why they are so unpredictable.

Also, the latest on the investigation to the tiger attack that killed one young man, injured two others. New reports the tiger may have been teased by the young men before the attack. It will be a busy night. We hope you join us at 10:00 p.m. Larry?

KING: Anderson Cooper, "AC 360," 10:00 Eastern, 7:00 Pacific. And tomorrow night we will be on follow the election coverage with our complete roundup anchored by Bob Woodward. I will be your host. And Rudy Giuliani and a lot of others will be the guests. We'll know all the Iowa results. That's tomorrow night at 9:00 Pacific, midnight Eastern.

(COMMERCIAL BREAK)

KING: Back with one of my favorite people, Suze Orman. Huntington Beach, California. Hello?

CALLER: Hi, thank you. In 2005, I received a small inheritance. And because I was living credit card debt free, I invested it in the stock market. In 2005, I earned 12 percent. In 2006, I earned 12 percent. In 2007, several things came up. My oldest daughter got married and we paid for the wedding. My younger daughter was in private college and we paid half of her tuition. And my husband lost his job.

So I am looking now at 31,000 dollars in stock market assets, and 30,000 dollars in credit card debt. I'm wondering if I should liquidate my stock and pay for my debt?

ORMAN: Yes, what is your interest rate on your debt.

CALLER: For new purchases, which is about half of the debt, it is zero percent for eight months. On the balance transfers, which is about 10,000, it's 3.99 percent for the life of the --

ORMAN: Here's the answer. If you are making more money on that money invested in the stock market than the interest you are paying on the credit card debt, you leave the money in the stock market. If you're paying more interest on the credit card debt than you are making on that money in the stock market, you liquidate the stock and pay off the debt.

Next thing is, how does that debt make you feel? If you are losing sleep over it, you don't know what to do, you can't stand the fact you have 30,000 dollars of credit card debt, your husband just lost his job, you don't know what to do, you get rid of the debt. However, I would keep money liquid so that you had emergency money, whether it's in the stock market or in a savings account until your husband got a job and you had more money coming in, because once you pay off the debt, that money is gone.

KING: Good advice. An e-mail question from Princeton, New Jersey; recently found over 100 series EE paper bonds in a shoe box. I purchased them through a former employer 15 years ago. The paper value for each bond is 100 dollars. What should I do with them?

ORMAN: First of all, go on the website -- it is at USTres.gov or PublicDebt.gov, or one of those things, and you will be able to put in the serial number that's on your double E series bond to find out exactly what the value of that bond is worth today, and the interest rate that it is paying you. If, in fact, it's paying you a high interest rate, or if it's worth, let's say 400, 500 dollars, and you want that money, just go to the bank and cash it in.

Remember, you will owe income tax on the 100 dollars of the face value and whatever it is that you get when you cash it in. You always pay tax on it.

KING: It increases that much, a bond?

ORMAN: Yes, it can increase. Now, in 15 years it will not quadruple, but that was just an example.

KING: Columbia, South Carolina. Hello.

CALLER: Hi, I'm a single woman. I'm 57 years old and I own my own business. Should I pay my mortgage off, even if I know I'm not going to stay here?

ORMAN: If you're not staying in your home, do not pay your mortgage off. If, however, you had said you're a 57-year-old woman, you're going to stay in that house for the rest of your life, would I want that to be your number one priority at this point your life, to pay off your mortgage? You bet I would. Nothing makes you feel more secure than owning your home outright. And if, god forbid, something happens to you, you don't have to worry about losing your home.

KING: We will be back with our remaining moments with Suze Orman on this edition of LARRY KING LIVE right after this.

(COMMERCIAL BREAK)

KING: We have an e-mail from Julie in Kent, Washington; can domestic partners be beneficiaries of term life?

ORMAN: Sure, domestic partners can be beneficiaries of anything. However, the way that you should set it up is, your partner should be the owner, you should be the insured, and your partner should be the beneficiary. Otherwise, if you are the owner and the insured and you die, the death benefit is in your estate. You then leave it to your partner. They are going to have possibly pay estate tax. The way you get around estate tax is making each other the owners of the property.

KING: That partner can be a gay relationship?

ORMAN: Yes, of course.

KING: You can make anybody an owner?

ORMAN: Sure.

KING: Brentwood, California. Hello?

CALLER: Hello. What would be the economic impact of Ron Paul's monetary policy to eliminate the Federal Reserve and put us back on something like a gold standard?

ORMAN: Boy, I have no idea. The chances of that happening are zero, so I personally don't care. There you go. KING: No chance we are going under the gold standard?

ORMAN: No chance. I don't waste my time --

KING: You're saying, you give 5,000 dollars a week?

ORMAN: Yes, one of the great things I'm involved with is Avon Corporation.

KING: Avon Calling?

ORMAN: Avon calling. They now have made it Hello, Tomorrow. Go to Hello, Tomorrow or go to SuzeOrman.com, and right on there you will see where it says, Hello Tomorrow Fund. Anybody can apply if you're working and you want to create something of your own -- you want to help other women, you want to help people, you want to become more. We are giving 5,000 dollars a week away. And we have been doing this now for almost six months.

So for New Year's Day, for instance, I judged -- I'm the head judge of this -- on 34 applicants and decided which ones should be getting the 5,000 dollars.

KING: And you have something that will help others?

ORMAN: Help others and help yourself at the same time.

KING: And just go to SuzeOrman.com?

ORMAN: Go to SuzeOrman.com and it's right there, the Hello Tomorrow Fund with Avon.

KING: Biggest thing you worry about?

ORMAN: Biggest thing I'm worried about.

KING: For people.

ORMAN: For people -- is that -- I said this before, that the middle class seriously is disappearing. They can't forward health insurance. They don't have the money to retire. They are losing their homes. They are in student loan debt and they can't afford to pay it off. The baby boomers are retiring and Social Security, Medicare, Medicaid and Medical are in jeopardy. I'm worried about all of that and I don't think the stock market going up is what solves that problem for individuals.

KING: What excites you the most?

ORMAN: What excites me the most is that, believe it or not, I think people are starting to get it, that others are not helping them, that they have to help themselves with money. So more and more, people are either calling into this show or maybe that 35 percent that did the survey tonight that don't have credit card debt, that excites me the most, that people are understanding they have the ability to save themselves, financially speaking, and they are starting to want to do it. That excites me.

KING: You think the low figures at Christmas time in retailing were good.

ORMAN: I do. And I know everybody flaunts retail should be going and all of this stuff. I look at individuals, not at the economy.

KING: I'm told we have another -- I didn't know we had another one. Another quick King Cam, quickly.

UNIDENTIFIED MALE: Hi, Suze, I have a couple of nieces and I wanted to put some seed money into a retirement fund for them. Where is the place that I can put it that will get the best return?

KING: We have 45 seconds.

ORMAN: For a retirement fund, you can't put money in a retirement fund for them unless they have earned income. So maybe you just want to put it into an account in their name or an account maybe in your name. You can put it in the Standard & Poors 500 Index Fund or the Spyder Exchange Trade Fund. Buy the entire market, since it's probably a little amount of money, and just watch it grow dollar cost average, and you will be fine.

KING: Any fool-proof investment?

ORMAN: Well, obviously, an investment is something you want to see grow. Put money in treasuries and CDs. I don't have a problem with the stock market, if you're investing for the next 10, 20, 30 years. I don't care if the market goes down. The market goes down, the more shares you will buy, the better you will be.

KING: Thank you, doll. Stay well.

ORMAN: Happy New Year to you.

KING: You too, and congratulations on "Women and Money" approaching a million in the stores.

If you haven't been to our website this year, check out CNN.com/LarryKing. You can email upcoming guests, participate in a quick vote, sign up for our news letter. We've also got our own podcasts, show highlights, and a Jack Hanna web extra. It's free and accessible 24 hours a day at CNN.com/LarryKing.

Tomorrow night, we'll have a special live show at midnight Eastern, 9:00 Pacific, with all the results of the Iowa caucuses. And now, Mr. New Years Eve himself -- that's what he's become -- our own Anderson Cooper and "AC 360." Anderson?

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