All about the challenges of Midlife Finance

The World According To Suze

Susan Lynn Ormanrecognize that name? 

 You know her better as Suze Orman, author, media personality, Oprah Winfrey confidant and all-around financial guru. Millions of people have read her books and watched her television program, called fittinglyThe Suze Orman Show. They’re looking for advice and assurance on everything from budgets to marriage to spending money on“Can I Afford It?”

     And Suze gives it to them.  

She also sells her books and a variety of financial packages and kits to customers listening from everywhere, including QVC and the Internet. Orman’s financial company does not advise clients, so much as it peddles insurance products. Millions of dollars worth, in fact.

 “But like so many great evangelists,” Susan Dominus points out in the New York Times,  “She herself was once a fallen woman, a lost soul in what would become her area of spiritual expertise.” Suze calls her father a “chicken-plucker” (he owned two delis), and says that she struggled to finish her B.A. at the University of Illinois. After seven years as a waitress, she tried to open a business funded by friends — and lost it all. While protesting the broker’s actions, she got a job at his company: Merrill Lynch. Some years of that, and she opened her own financial company, only to lose ground when a former assistant took her client list and other info. Turns out Suze owed the assistant commissons — and some of the other struggles had their shady moments, as well. But nonetheless, those difficulties gave her plenty to write about, in the form of six books, hundreds of articles, several regular columns (including one for O) and hundreds of telecasts.

     Perhaps those years of struggle are why she doesn’t hesitate to do what she calls “smackdowns:” flat-honest, sometimes rude assessments of the people who have come to her for advice. (“You lie, you lie, you lie,” she said to Nadya Suleman, better known as Octomom, during an Oprah Winfrey show segment. Suze may have been rough about it — but she was right.)

     The best of Suze, though, are her books, starting with You Earned It, Don’t Lose It, and (so far, at least) ending with The Money Class. They’re nearly as straightforward as their author’s vocal approach, filled with plenty of advice about cutting expenses, looking for the best 401K, investing and insurance plans. (No surprise here.) She also emphasizes building a safety net (about 8 months of expenses, at least), and mostly importantly, cutting back on luxuries.

      Things do change. For example, Suze’s later books are more willing to allow for a credit card balance, something she was adamantly against in earlier books. Back then, she said the smart thing was to pay off the credit card every month. Now, she recommends cutting back, and paying more than the minimum — but that’s all.

Her best books, to this reviewer’s mind, at least, are two of her earlier ones: The 9 Steps to Financial Freedom and The Courage to Be Rich. Suze spends time dispensing practical advice, but she also hones in on three important things:

  *How you were raised back then has a strong influence on how you handle, feel about and use your own finances today.

     *Your parents’ money decisions, whether you agreed with them or not, have a strong influence on your own.

     *You have the ability to break these influences — or at least acknowledge and deal with them properly. 

Treat money, like time and energy, with little respect, says Orman, and that’s what you’ll get — unhappiness and a dysfunctional lifestyle for yourself and family, either. It’s not about how much you make. (Though a healthy income helps.) It’s more about you use that income effectively, not only for yourself but to help others. Her message has struck a particularly strong note with women, with its focus on “take charge” and self-empowerment issues.

     There are some tarnished moments in the Orman universe. For starters, she’s woefully behind on her blogposts. (The last comment aired in October 2013.) And there is a strong sales push for every item in her product line, something people who don’t like her have pointed out. Everything is for sale, Suze included. “I’m not in this for charity. This is a business, and anybody who thinks that it’s not a business is an idiot,” she said in a recent interview.

     But the dimmest bulb in Suze’s world has to be her “Approved” debit card.

Although she approves debit cards in general, because they “don’t allow you to spend money you don’t have,” Suze’s card charges $3 monthly just to keep the account open, as well as extra for a boatload of fees, including the privilege of calling customer service. ($2 a call.) She has implied that just having it will automatically improve the owner’s credit score, thus improving their ability to get loans and low interest rates. (It’s not true.)

The other interesting factor is how Suze invests her own money. At least 75% of her fortune is in highly conservative.zero-coupon municipal bonds. (Stable, unassumingand earning her about 4.5% a year.) Much of the rest (about $5 million or so) is in real estate, including places in New York City, Florida and South Africa. Only a small percentage ($1 million or so) is in stocks and mutual funds — Suze had more, but felt uneasy about them after the stock market’s wild rides up and down.

     Granted, when you’ve got millions of dollars in your portfolio, a few splurges are a given — but like Warren Buffett, they’re sometimes bingefests at Taco Bell, or indulging a taste for hot dogs. Even Suze’s taste for expensive clothes or watches is doable, since she can afford it.

     Her main message, though, is much more to the point: “Spending a cent on any ‘want’ when your long-term needs are being ignored or shortchanged is irresponsible. Take care of the basics first. Good advice, strongly given — and if you can rein back the urge to buy up everything Suze-related, it’s quite helpful.

3 Responses to The World According To Suze

  1. I like how honest (though sometimes rude) she is to people who can’t afford something. We tend to only hear what we want, so when it is sugar-coated, people hear that there is a chance they can afford it and will buy it regardless. When you tell them straight up, they have no other choice but to hear you.

    As for her debit card, she lost me on that one. It wasn’t a smart thing on her end and I know she got a lot of flack for it.

  2. I’m surprised she went along with the debit card idea — she would have given something like that a hard time, had anyone else done it!

    Thanks so much for posting, Jon — you always have interesting things to say.

  3. […] remember that their bottom line is sales — not your ultimate good. Financial pundits like Suze Orman and Dave Ramsey may be giving out free advice — but they also have products they wish you […]

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