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ORMAN: Yes, selling a home right now, depending on the area that you live in -- if you're in California, Nevada, Arizona, you know, places like that, even, you know, there is Florida -- you'd better be lowering your prices big time and not be sitting on your profits here.
KING: Not in luxury areas.
ORMAN: No. Well, you know, certain areas you're going to get it, so lower them. Other areas, such as Seattle, places like that, hey, you can still ask your price and probably get it.
KING: Would you go into the stock market now?
ORMAN: I absolutely would go into the stock market right now, as long as you had at least 10 years or longer until you needed your money. Because anything can happen at any time. And if you go in -- and that's when investing is about -- long-term. If you need your money next month, what are you doing in the stock marke...
KING: Don't most people need their money?
ORMAN: No. No, not necessarily. Most people who are investing in the stock market today are usually doing it through that you're 401(k) plan and they're doing it for retirement. So, no, they don't need it right away.
KING: An e-mail from Rasa in Tucson: "My daughters are aged 19 and 22. Each have $10,000. How should they invest it?"
ORMAN: Well, are those 19- and 22-year-olds, is the 19-year-old going to have to go to college and pay for it?
Does the 22-year-old, has she gone to college and does she have student loans?
So, the first thing you want to do is everybody needs what I call a save yourself account, an emergency fund, where this money just sits there making 4.5, 5 percent interest rate. You can still get that at any bank today, and a lot of the banks are giving you that.
Why not just let it sit there for the time that want to buy a home, for when they do need emergency money?
I would just let that kind of money, believe it or not, sit there.
KING: We're on a roll, Suze.
ORMAN: You've got it.
KING: We have a King cam question. This is about establishing credit.
LISA: Hi, Suze.
I'm Lisa. I'm a recent college graduate and I was wondering, what's the best way to build good credit?
ORMAN: The best way to build good credit is, believe it or not, to get credit cards. But whatever you do, do not charge your credit cards to the max. Credit is built and when it's built, you get something known as an FICO score. A FICO score is a three digit number that determines the interest rates that you will pay o...
If you get a credit card and you charge it to the max, your FICO score goes down. So you might get credit cards, but whatever you do, only get credit cards and pay them off in full every month.
Do you hear me?
KING: We'll be right back with more of Suze Orman.
Her new book, "Women and Money: Owning the Power To Control Your Destiny"
Don't go away.
UNIDENTIFIED FEMALE: Serious signs of trouble in the real estate market.
UNIDENTIFIED FEMALE: Foreclosures rose.
UNIDENTIFIED FEMALE: Building permits drop.
UNIDENTIFIED FEMALE: And home prices, well, they are still falling.
UNIDENTIFIED MALE: People are really counting on the Fed to drop interest rates, but that might not happen.
KING: By the way, Suze and I would like to wish all of our Jewish friends a very happy new year, and we're among those friends, because we're part of the tribe.
ORMAN: What are we doing working tonight?
KING: What year is it?
Fifteen something.
ORMAN: Oh, I don't know. I'm not good with numbers.
KING: I never know the year.
ORMAN: I know.
KING: I never know the year.
Anyway, we have an e-mail question from Denise in Mitchellville, Maryland: "If you fill out a credit card application and it's approved, but during the processing time you decide you don't want it and cancel the card before it's sent to you, how will it affect your credit score?"
ORMAN: It won't hurt you at all. What hurts your FICO scores or your credit scores are when you cancel credit cards that you've have had for a very long time, because 10 percent of your FICO score is made up of your credit history. If you get a brand new card and you cancel it right away, it really is not going to hurt...
KING: It's like never using it.
ORMAN: So you never used it. So that's not going to hurt you that much at all.
KING: What's the Fed going to do at the meeting next week?
ORMAN: Well, hopefully, they're going to lower at least half a percent. If they don't, I hate to see what happens in the stock market. I hate to see what happens in the economy, because the markets have absolutely priced in at least a half a percent decrease.
Although, I have to tell you, Ben boy over there is a very interesting character. So he might just lower a quarter percent.
KING: Let's take a call.
San Antonio, Texas for Suze Orman.
UNIDENTIFIED FEMALE: My question is, my husband died in a medical malpractice accident. I was given a settlement. So now I'm single and I make about $60,000 a year.
ORMAN: My question is, do I pay off my house?
And they offered me to buy an annuity, for which I wouldn't see anything for 12 or 13 years. And I...
ORMAN: All right, let me ask you this, how old are you right now?
ORMAN: Forty-five.
Are you living in a home that you plan to stay in for the rest of your life or for a long time?
ORMAN: How soon before you leave?
UNIDENTIFIED FEMALE: As soon as this is settled.
ORMAN: All right, then you do not, if that is the case, you do not take this money and pay off the mortgage on your home. If you had said to me, yes, you're going to stay in that house forever, I would say absolutely pay off the mortgage on your home.
However, given that you're leaving, you are going to take this money, you are not going to get the annuity. Don't take that settlement. Take it, put the money in a money market fund that's paying you approximately 5 percent right now. You leave it there and stay safe and sound until you find a home that you want and th...
KING: Another e-mail from -- thank you, dear.
Another e-mail from Susie in Hastings, New York: "In regards to working to get a better credit score, once you pay off a credit card, is it better to close the account or keep it open and just not use it?"
ORMAN: Susie, Susie, listen to me. I love your name, by the way. Never, ever, ever close down a credit card once you have paid it off.
Why? Not only are you closing down your credit history, which I said a second ago counts for 10 percent of your score. However, here is the real reason. Thirty percent of your credit score is made up of something called your debt to credit limit ratio -- how much you owe to the credit limit the credit cards have given ...
KING: Keep it.
Another King cam question.
This is about investment strategies for retirement.
My question for you is what would be the best investment opportunity for a person in their mid-30s who have that American dream to retire early?
What should we do?
Where do we go?
ORMAN: Ooh. You go many places, truthfully. But if you qualify, a Roth IRA is the best investment retirement account you will find, bar none. A Roth IRA is where you put money after taxes -- $4,000 if you're under 50, $5,000 if you're 50 or over -- into an account where the money grows tax-free. You can take it out tax...
Within a Roth IRA, you might want a dollar cost average into some exchange traded funds that invest in the stock market, such as SPDRs, Diamonds. You might even want 10 or 20 percent of your money overseas. A good place to go right now. That's a good place for you to start.
KING: E-mail from Cathy in Fort Worth: "I'm eligible for Social Security, but I'm still working. Is it wise to begin drawing Social Security at this time?"
ORMAN: It depends how old you are, my dear, Cath. If you were 65, for instance, you could be working and making any amount of money and still not get your Social Security docked. So absolutely, 65, 66 -- because depending on your ages right now is when you get full Social Security. Take it then.
However, if you're 62 years of age, you're making under about $13,000 a year, I would also take Social Security. If you're 62 making over that, wait until you're 65, because they'll penalize you.
KING: Suze Orman is the guest. Back with more moments, more e-mails and a couple more King cams, too.
By the way, tomorrow night, President Bush addresses the nation at 9:00 Eastern, 6:00 Pacific.
We will follow that -- immediately following that address. And among our guests will be Senator Barack Obama, Senator John McCain and Senator John Edwards.
We'll be right back.
ORMAN: What are the eight qualities of a wealthy woman?
Let's start. Harmony and balance. Courage. Generosity. Happiness. Cleanliness. Inner beauty. Wisdom. These qualities all have to be working as one. If one of these qualities is missing, you will not have the wealth that you want in your life.
KING: We're back.
Suze's new book is "Women and Money: Owning the Power To Control Your Destiny." There you see its cover.
A lot of e-mails tonight.
We thought we'd mingle the public in a lot with Suze.
An e-mail question from Gabby in Jacksonville, Florida: "I have a lot of debt, but I've cut up my credit cards and am working to change my spending habits. I want to take money out of my 401(k) to ease -- to erase the debt. Is that a good idea?"
ORMAN: Oh, Gabby, please, I'm begging you, don't do it. Don't do it. Don't do it.
Money that you've put into your 401(k) is money that you have never paid taxes on. When you take a loan from your 401(k) -- and that's the way people get money out, is they loan it -- they think they're doing a great thing because they pay themselves back with interest.
Here's the problem. You pay your money back into your 401(k) with money you have already paid taxes on.
Later on in life, when you go to take the money out again, guess what? You're going to pay taxes on that money again. You're volunteering for double taxation. Don't do it. It makes absolutely no sense to ever take a loan from a 401(k).
KING: We have another King cam question, this dealing with student loans.
UNIDENTIFIED MALE: I'm getting letters to refinance my student loans and I don't know if that's something I should do. The letters are saying, from my bank, that if I don't refinance, that my rates will go up.
So should I refinance?
ORMAN: I'm not exactly sure the correct word there, by the way, is refinance, because what normally happens with a student loan is you consolidate it. And when you consolidate a student loan, that is when you lock in an interest rate forever.
Interest rates right now on student loans, when you get a new student loan, is 6.8 percent. Years ago, the loans were a lot less. But many years ago, the loans were a lot higher.
So depending on your situation, really, you didn't give me enough information to tell you if you should consolidate or not. But you should at least lock in a good, low interest rate if you can.
KING: Let's take a call from Arnold, Missouri.
Hi, Larry.
Hi, Suze.
UNIDENTIFIED FEMALE: I'm calling in behalf of a friend. The son has got an 8020.
UNIDENTIFIED FEMALE: And he wants to keep his home, but his 80 per -- his major loan is an ARM loan and his loan is going to go up like about a thousand dollars.
UNIDENTIFIED FEMALE: And he can't afford to do that kind of an increase.
Is there any way that he can talk to the mortgage company to keep his home so that it doesn't become part of the two million homes that are in foreclosure now?
ORMAN: Hmm. Well, what he can do is he can try to see if he can postpone it all or if the bank will work with him on any level. That's a lot about what the government is talking about right now -- will banks work with the people that they've lent money to.