Suze Orman Blog: 2015

Wednesday, December 9, 2015

Take time and figure out your life goals

"I am not going to suggest that every 22-year-old take eight years to find the path they want to pursue. But at the same time, I hope you are kind to yourself. That you give yourself the time and space to figure things out. If there is a 22-year-old out there reading this and feeling adrift, I have this to say to you: Been there, done that. And look at me — it all turned out better than fine, right?"

After seven years working as waitress, Suze Orman landed a job as a trainee stock broker, at the age of 30. Today, she is a multi millionaire said to be worth US$35 million.

Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.

Monday, October 26, 2015

Be your own financial advisor

Suze Orman has stood firmly against traditional financial services since she first started publishing her self-help books in the 1990's. And over the years, she has encouraged her followers to use common sense when it comes financial matters, like avoiding overspending and undersaving.

Orman often jokes that a financial broker will “make you broker.” Her biggest pet peeve with financial advisors is that most are only looking to sell products.

But even Orman admits that not all financial advisors are bad.

Bad vs Good financial advisors
Suze Orman warns that working with a financial advisor who earns all of his or her money through commission on the investments you buy and sell will never have your best interests in mind. These advisors will only be interested in getting you to do a lot of buying and selling.

Whether you realize it or not, many financial advisors still get hidden kickbacks” from their brokers. This means that a large portion of your commission is given to them from their broker. So, even if advisors don’t explicitly work on commissions, they may still receive these hidden kickbacks. That’s why Suze Orman recommends working with advisors who only charge an upfront, flat fee.

Monday, October 5, 2015

Smart tips for managing retirement and post retirement

Get educated on Social Security benefits

You need to know when to take social security and when not to, and how Medicare works. When do you start taking money out of your account?

Have a will to minimize complications later

If you haven't told your kids what [they're getting when you die], they'll fight over what you have. No matter what age you are you now need a will. You need a living trust.

And you need to be sure that your spouse has the very same things — even if you think it's way too soon for that type of conversation.

Get your paperwork in place today to protect yourself tomorrow. You need to know that you have everything about your affairs [in order] so you don't become a burden.

The less money you have. The more you need it.

Wednesday, September 30, 2015

Losing a loved one is hard and lonely

If you lose a spouse or a loved one, you'll get lonely. You'll want to see your kids more. You really have to understand the loneliness factor.

Suze Orman is a award winning certified financial planner and author of several books including 'The Road to Wealth'. She went from being a waitress at age 30, making $400 a month, to now having her own TV show and a net worth of $30 million dollars.

Monday, September 28, 2015

Ask the right retirement questions

How much do I need to retire is a stupid question. The real question is, 'What is the best way I can save for my retirement?'

Own your own home. Get rid of your debt. Live below your means but within your needs.

Compound interest and investing

When you invest money and your money earns money, and that money starts to earn money, it compounds like a snowball down a hill," said Orman. "It's a financial snowball effect."

Monday, September 14, 2015

Women need to be strong and take charge of their MONEY and Finances

Women have been thrust into an entirely new relationship with money that is profoundly different from anything we have ever encountered before. The shifting roles of women at home and at work have dramatically changed where and how money interacts with a woman's life.

Becoming truly powerful in a lasting, beneficial way is never done at the expense of others; it is done for the good of all.

Women are the bedrock of their families, of their communities -- so many are dependent on us. If we stand strong and know who we are and what we can create, we will easily be able to hold up those we love and those who need a helping hand.

Monday, August 24, 2015

Suze Orman praises Jillian Michaels and the power of mentoring

A true powerhouse such as Jillian Michaels does not really need to be mentored — she just needed a sounding board for her already great ideas. Her problem was too many great ideas all going in different directions.

Jillian also needed to understand one key fact: Let others think what they want; they are going to think that anyway. People love to build you up — and then once you get to the top, they love to tear you down.

In business, not everyone you work with does things for the right reasons. When you are a person like Jillian who does things out of integrity, it hurts when you are bitten in the back by others.

Jillian is tough; I am tough, but it all comes from a soft place known as the heart. At times, Jillian was portrayed as a lot meaner and tougher than she really is. That would bother her. Jillian needed to get tougher in those areas. She needed to define herself and not let others define her. As soon as she got that, she was on her way — and still is.

In mentoring it is not enough to look successful on the outside — your success has to bring you peace on the inside. You can't teach others to be financially free if you yourself have not done so. One’s rise from a seemingly hopeless situation gives others hope. As long as others have hope when they see you, then you have done your job. And as long as you do what is right instead of doing what is easy, you never have to care what others think. Remember: the elephant keeps walking as the dogs keep barking.

The key to being a good mentor is to help people become more of who they already are — not to make them more like you.

As for me, my mentors have been people who I would never want to be like. They may have big personas, but who they are on the big screen is not who they are in real life. I always wanted to be the same both on- and off-screen.

Everyone in life can be your mentor whether they know it or not.

Tuesday, August 18, 2015

The key to success is to do just one thing well

Too many people try to be great at a lot of stuff. The key to success? Do what you do better than anyone else can possibly do it. Then just do that ONE thing. Whatever you do has to relate to just that ONE thing.

Tuesday, June 30, 2015

Suze Orman mom blamed herself for her daughter orientation

Finally. No more “gay “marriage. The Supreme Court’s momentous ruling makes that odd clarifier unnecessary, as the sexual orientation of a couple that chooses to marry has no bearing on their legal and financial rights.

What a triumph for us all. And I do mean all, not just those of us who happen to be gay.

I can’t stop thinking about my dear mother Ann, who died in 2012 at the age of 97. I have no doubt my mother loved me. And it was a gift that as she aged, I — along with my wife, KT — was able to help her live with grace and dignity. We moved to Florida in 2009 from San Francisco in large part to be closer to her and other family members.

But there was always an unspoken chasm between us. While it was abundantly clear to her how happy and fulfilled I was from the day I met KT, she never was able to fully embrace our relationship. For the simple reason that to her death, my mother on some level blamed herself that I “ended up” gay. She was convinced she had failed me in some way.

As personal as that lifelong disconnect was, I know it is one that is all too common for many gay families. Love, with an asterisk.

If my mother were alive today, I imagine the Supreme Court’s decision would have been a great gift for her. It would have given her resounding outside validation that we are all — and again, I do mean all — equal under the law. That’s not some magical thinking borne of my desire for my mother to accept me for me. What was always hurtful to me was that she was so unaccepting of herself; her judging her failure as a parent because I was gay.

No amount of my personal success and happiness could convince her that I was no different than my (straight) brothers. But the Supreme Court’s validation of gay marriage just might have given her the space to accept that there was nothing wrong, or different, about me, and thus nothing she ever should have blamed herself for.

There is much to celebrate in the Supreme Court’s decision. For all the parents who love their gay child, but like my mother have struggled to fully embrace that reality, I hope the Supreme Court’s decision finally gives you some peace of mind. We are all equal. Our highest court says so. You can stop judging yourself, and just get down to the business of loving yourself, and your children, unequivocally.

Monday, June 15, 2015

Suze Orman tips for college students

Forget all the commencement speeches about your dreaming big, not compromising, and following your passion. That’s all terrific advice, but not nearly as important as the nuts and bolts of four make-or-break financial moves every college grad needs to make ASAP:

- Get On Top of Your Student Loans. Yes, you have a six-month grace period before repayment of federal loans must begin. Don’t you dare wait five months and three weeks before focusing on this. Screw up on repayment is one of the most damaging mistakes you can ever make, and it becomes both hard and expensive to get on track if you fall behind.

- Make Sure You Have Health Insurance. If you haven’t yet started a job with benefits, or you’re taking a gap year, please don’t go naked here. Yes, the odds are low you might get sick, but insurance is about protecting yourself from the big “what ifs.” Besides, it’s not just about illness; any type of injury can set you back, from a broken bone to a torn ACL. If your parents have health insurance from an employer they should be able to carry you on that policy until you are 26, for a cost. Ask them to find out the cost, then compare it to what you can purchase for yourself (Go to healthcare.gov). If you and your parents decide it’s best to go with their plan, and you have a paying job, you should pay your share of their premium, or at the very least contribute. You’re their kid, but you are also an adult now.

- Get a Credit Card…if You Don’t Already Have One. As much as I applaud using just a debit card-paying as you go, rather than being tempted to overspend with a credit card-it still is important to have a credit card as well. The goal is to use it just a few times each month-for small purchases. And then pay your bill, in full, each month. Doing that is going to go a long way in establishing a solid credit score.

- Automate Savings ASAP. Okay, you know how I feel about the emergency fund. And you know how I feel about saving for retirement. Both are non-negotiable Must Do’s-and the sooner the smarter. I respect you may not have a big income just yet. But please listen to me: that’s not an excuse for doing nothing. You need to do something-save something-every month.

- Emergency Savings: Set up an automatic monthly transfer (it should be free) from your checking account into a separate savings account. How much? Well, how much feels right? Then add 10% to that number. That’s my challenge. Just try it for six months. I think you will surprise yourself at how doable it is, and how powerful it feels to start building an emergency savings account.

- Retirement Savings:If you are offered a workplace retirement plan that comes with a company matching contribution, you better grab it. Be sure to confirm that you are contributing enough to qualify for the maximum match from your boss. It’s sad, but many companies set the “default” contribution rate for new employees at such a low level that the employee doesn’t get all the matching contribution they are entitled to. Don’t make that mistake!

- If you don’t have a retirement plan through work, or the plan doesn’t offer a match, the best first-step for new grads is to start saving via a Roth IRA. Again, you can set up a monthly transfer from a checking account into a Roth IRA investment account. Some discount brokerages, such as TDAmeritrade don’t have a high minimum initial investment, so you can get started transferring say $100 or so a month into a Roth IRA.

Monday, June 8, 2015

Do you need to get Life Insurance - Suze Orman

Life insurance is such a difficult financial hurdle for so many of you. You’re either queasy about pondering the need for it in the first place, or you are rightfully queasy about getting taken by an agent selling you a way-too-expensive policy.

Okay, I am going to make this super clear and easy: Answer these five questions and you will know exactly what to do.:

1. Is anyone dependent on your income? Such as a spouse, partner, child, parent, or sibling?

No: You don’t need life insurance.
Yes: Keep Reading

2. Do you expect that you will need to provide that financial support forever-say for someone with special needs?

Yes: I recommend you speak with a trusted insurance agent-ask friends and family for recommendations--about the need for a Permanent life insurance policy.

3. Do you want to protect a dependent for a set period of years: say until a young child is an independent adult, or until your mortgage is paid off, so a spouse or partner would be protected? Or to cover a one-time expense such as college costs or funeral expenses?

Yes: All you need is Term Life Insurance. Term insurance is very inexpensive, because it will be in place for just a set term-such as 10 or 20 years-not forever.

4. Do you want to make sure that in the event that you were to die prematurely your dependents would not have any financial worries?

Yes: Buy a term life insurance policy with a death benefit that is equal to at least 20 times your dependents annual income needs.

With such a large death benefit, your dependents will be able to invest the money very conservatively-say in high quality municipal bonds-and live off the income.

5. Are you okay with your annual insurance premium changing (becoming more expensive) every few years?

No: Of course you’re not!. Shop for a level premium term life insurance policy. And make sure it is guaranteed renewable as well. A guaranteed level term policy means that your annual premiums will never change, and that as long as you keep up the payments the policy will remain exactly as it was on the day you purchased it. You can shop online for term life insurance;

Monday, May 25, 2015

Get your free credit report to know if somethings not right

Your credit score is calculated based on information in your credit report. The sad reality is that credit reports often contain lots of mistakes that can pull down your credit score.

You have a credit report from each of the three credit bureaus: Equifax, Experian and TransUnion.

The credit bureaus are required to give you a free credit report once a year. The only place you should request a credit report is at annualcreditreport.com. Once you have a report scour it carefully. If you find a mistake-such as a debt you paid off that is still showing up as unpaid-follow the directions to submit a dispute.

Monday, May 18, 2015

Store credit cards can be hard to resist for many

I know it’s tempting when you’re checking out and are enticed to sign up for a store credit card to qualify for a discount. Resist the temptation! Opening new credit will cause your credit score to take a temporary dip. If you don’t need the credit, don’t take it! And besides, store credit cards are the worst deal around, as they charge insanely high interest rates.

Monday, May 11, 2015

Spend less on credit card to Boost credit score

You know I am a big believer in pay as you go: use cash or a debit card that does not have overdraft protection. That way you only spend what you have. At the same time, I want you to use a credit card a few times a month.

Debit card payments aren’t tracked by the credit bureaus, so you need credit card charges to help build a credit score. The trick is to only charge a few items a month, and then pay off the bill in full. By limiting your credit card balances-and paying them off-you will have a great debt-to-total credit ratio. This is a formula that accounts for 30% of your credit score. The formula divides your total outstanding credit card limits by the amount of your existing unpaid balances. The lower the ratio the better. Aim for less than 30%.

Monday, May 4, 2015

Buy a car with long term loan can be expensive mistake

If you lack the cash to buy a car free and clear, you really need to hear me out on the two worst financing moves you can make. What I am about to tell you can save you hundreds, if not thousands of dollars. And trust me, this is exactly what car dealers and financing companies don’t want you to know:

A car loan longer than 36 months is a waste of money. I know, I know, there are all those great looking ads showing how “affordable” a payment will be with a 60 month or 72 month car loan. Don’t fall for it. For starters, we need to get on the same page: A car is the worst investment. Why? Because from the moment you drive it off the lot it loses value. You will never recoup what you paid for the car when you eventually sell it. Got it? Good.

So if you’re going to lose money on this deal, why would you agree to pay more interest on the loan? That’s exactly what you end up doing when you choose a longer repayment term.

The reason the car industry hawks five year (and longer) loans is because they want to entice you to buy a more expensive car. The longer the term, the lower your monthly payments. But what they don’t point out to you-and I do-is that because the payments go on for a longer time, you end up spending more over the life of the loan….for a crappy investment.

Tuesday, April 28, 2015

Buy home or Rent

I am a big believer in home ownership, but only if it makes financial sense. If you answer yes to any of these questions you are better off renting:

Is there any chance you would want to move within five or so years? It costs a lot of money to sell a home, starting with the typical 6% commission you will owe your real estate agent. Then there are moving costs and transfer fees in some areas. Add it all up and I think it’s smart to expect you will use around 10% of the sale price just to cover all your sales-related expenses. The sooner you sell the less likely you will have built up enough equity to cover those costs.

Is your credit score below 740? A FICO credit score of at least 740 is going to put you in the position to land the best loan deal. Anything below that and I would recommend taking the time to get your score higher before you shop for a house. Qualifying for a mortgage that is just an eighth or a quarter point lower because of a solid credit score can save you tens of thousands of dollars in interest costs over the life of a loan.

Do you have less than eight months of living expenses set aside in an emergency fund? I know that’s a high bar. For a reason: your peace of mind. Until you have this safety cushion in place I don’t want you taking on any big financial obligations. And it gets no bigger than a mortgage.

Will you be making a down payment of less than 20%? Yes, I am well aware lenders will be happy to give you a mortgage with a down payment of as little as 3% or so. Don’t fall for it. When you make a low down payment you often will be hit with a higher interest rate. And any mortgage (other than a VA-backed loan) that is for more than 80% of the purchase price will require that you have private mortgage insurance. The bottom line is that low down payment mortgages end up costing you a lot. And most important, I think saving up for a down payment is an important step: it requires patience and resolve. And the ability to save! That’s just the sort of person who gets my approval to buy a home.

Monday, March 30, 2015

Suze Orman's new show Money Wars

Suze Orman's news show yet to debut called “Money Wars” is described to be involving family disputes on money. It could be a cross between “Peoples Court” and sensible monetary savvy in which she will play the part of a mediator who as her guests, common people today, settle monetary disputes in between family members and friends.

Monday, February 23, 2015

Suze Orman on investing in Dividend Funds

Companies that regularly pay dividends tend to be stable firms with strong balance sheets and stock worth owning -- especially if they consistently sustain or increase the payouts. Be aware, though, that companies cut back or suspend stock dividends altogether if faced with real trouble, such as a major financial crisis. You could start by choosing low-cost, no-load mutual funds or exchange-traded funds that focus on the stocks of dividend-paying companies. The SPDR S&P Dividend ETF draws from S&P 1500 companies that have increased their dividend payouts for at least 20 years in a row. Both the Vanguard Dividend Appreciation ETF and the Schwab U.S. Dividend Equity ETF include the stocks of companies that have paid dividends for at least ten consecutive years; they charge slightly lower annual fees than the SPDR (0.10 percent or less, compared with 0.35 percent).

If you prefer not to open an account with a broker, you'll have to invest in a mutual fund rather than an ETF. Try the Vanguard Dividend Appreciation Index Fund, which charges a low 0.20 percent annual fee.

A well-diversified investment portfolio also includes international stocks and bonds, as well as some cash. I encourage you to learn about asset allocation and consider your options beyond U.S. companies. You can find free information on the websites of the brokers Fidelity, T. Rowe Price and Vanguard. If you decide to see a financial planner, avoid any potential conflicts of interest by selecting an adviser who charges a flat fee rather than a commission.

Tuesday, February 17, 2015

Get rid of credit card debt

I've always advised staying away from store cards, which their insanely high interest rates. The retailer lures in with a 5 or 10 percent discount, which becomes worthless as soon as you're charged 25 percent interest on your unpaid balance.

If you have any balances, pay them immediately.

Monday, February 9, 2015

Suze Orman shares a story on overcoming negativity

I’ve built a successful career around giving advice. And that very success has often made me a target of criticism. Not helpful, constructive criticism, but nasty feedback entirely disconnected from facts.

When I first encountered the blowback, I was angry and confused. Angry at how my work was being misrepresented and misconstrued. Confused by why the attacks grew in lockstep with my success.

Then I learned to be an elephant.

A wise teacher from India shared this insight: The elephant keeps walking as the dogs keep barking.

The sad fact is that we all have to navigate our way around the dogs in our career: external critics, competitors, horrible bosses, or colleagues who undermine. Based on my experience, I would advise you to prepare for the yapping to increase along with your success.

You can’t tame the barking dogs. But you have it within your power to completely tune them out. By being an elephant that keeps walking while the dogs are barking.

Channeling your inner elephant is a healthy exercise in being focused on who you are and what you believe in, rather than letting others do the defining. The only thing that matters is what you know to be true about your goals and intentions. Everything else is noise.

While the world would definitely be a better place without vindictive and misinformed dogs, I have learned to make peace with their existence. And used it to my advantage. Being an elephant has made me stronger and more resolute, and helped me become even more compassionate. It delights me to turn the dogs’ vitriol into my virtue.

Suze Orman on co-signing a loan

I couldn't be more against the idea of co-signing a loan because when you do, you become the one responsible for that loan. Most of the time when you are asked to co-sign, it’s because the other person can’t qualify on their own. If they can’t qualify on their own, you’re going to get stuck.

Monday, February 2, 2015

How to know if you are financially prepared to have a baby

Let’s play baby. The average cost of having a baby today is about $1,300 a month.

So let’s pretend you have already had a baby to see if you can afford to quit your job. Take 100 percent of the mom's salary and put it in the bank. Then take $1,300-$1,500 a month from the dad's salary and put that in the bank.

If you can make it on what's left over from the father's salary, you know you can afford a baby without the mom having to return to work.

Monday, January 26, 2015

Paying for Kids college education

Why do you feel that you need to be obligated to pay for your children?

We make it when we have to do it on our own. It’s an honor to take care of your parents, but kids? This isn’t about desire to help, it's about guilt. Say ‘no’ out of of love for yourself, versus ‘yes’ out of fear that they won’t love you.

Wednesday, January 21, 2015

Get a prenup early

Do you have a prenup? You should get a prenup when you're in a state of love, not when you're in a state of hate.

Monday, January 19, 2015

What hurts credit score

What hurts your credit score is if you pay your bills late or if you spend too much on credit in comparison to what you have. The best way to save your FICO score is to pay your bills on time, don’t charge those credit cards and don’t worry about the rest in terms of savings.

Monday, January 12, 2015

When to start contributing to retirement plan

It’s never too soon[to start contributing to retirement plan]. If you put $2,000 into a Roth IRA at 8 percent interest today, you will have $94,000 in 40 years. If you put $2,000 per year into a Roth IRA, you can have more than $1 million in 50 years.

Monday, January 5, 2015

Quote on making mistakes

Mistakes aren't half as important as what you do to correct them. Don’t be afraid to go out on a limb, because that is where the fruit is.