Suze Orman Advises Against ER!

Nords said:
Maybe I'm missing the irony/sarcasm, but you realize that I am "this guy" you're referring to?

Her debit card (with its fees) doesn't support anyone-- especially not the unbanked-- including the troops. "Support" would be having the card pay its expenses from advertising, or donating the profits to some worthy cause. But admonishing people that her product is good for them, and then charging for it, and then calling her critics "idiots"... I'm not feelin' the love there.

As for the disrespect, that's why I included the transcript. She missed a valuable opportunity to discuss military benefits with her audience. Would you like to be spoken to that way in a private conversation, let alone on national TV?
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No irony or sarcasm intended, as i did not associate you as being the one who wrote the articles.

I was only saying your titles are a little misleading. I agree her card with the fees doesn't really support anyone but her. however, the title didn't say that; it said not supporting the soldiers, which leads one to perceive the card was geared towards ripping off our troops only.

Again, from reading the transcript, I do not see any intended disrespect towards our troops. I do agree she should have been a little more up to speed on military pensions, but just because she wasnt doesn't imply disrespect, and leading one to believe that is disrespect is not right either. I also did not think that transcript differed from the way she has talked to other folks on her program; is she a little pushy- no doubt about it, but i do not think she is disrespectful. I did pick up her concern for the future of the pension, I think she was indicating the COLA formula could change or there could be annual freezes, which would maybe not allow the pension to keep up with inflation.
 
I trust FireCalc more than I'll ever trust Suze.
 
To answer a few who questioned why I watch, I thought it was clear - I only watch for the Can I Afford It and How Am I Doing segments and I FF through the rest of the show. The former is amusing, how clueless so many callers are when they're up to their eyeballs in debt, have zero savings, are in their 40's or 50's and want to blow a huge sum on something frivolous. The latter I like because I like seeing how well prepared people are for retirement and I gauge them against where I was at their age. I did not even bother to record the show last night.
 
veremchuka said:
To answer a few who questioned why I watch, I thought it was clear - I only watch for the Can I Afford It and How Am I Doing segments and I FF through the rest of the show. The former is amusing, how clueless so many callers are when they're up to their eyeballs in debt, have zero savings, are in their 40's or 50's and want to blow a huge sum on something frivolous. The latter I like because I like seeing how well prepared people are for retirement and I gauge them against where I was at their age. I did not even bother to record the show last night.
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I rarely watch Suze but those two segments are the only ones I care to watch, too, and for the same reasons you stated.
 
traineeinvestor said:
It's the teeth - I keep thinking "Twilight".
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That and the meth addict stare.

On the rare occasion that I watch this sort of show, I much prefer "Til Debt Do Us Part," a Canadian show that is on US cable.
 
traineeinvestor said:
It's the teeth - I keep thinking "Twilight".
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So many media and celeb types have gone overboard with teeth bleaching. When teeth get so bright as to seem to shine on their own it looks very unnatural and unappealing.
 
This was probably 10 years ago, but she told a 50ish something woman who was lending to her 30 something kids -- "if they drive a car nicer than yours -you shouldn't be lending to them" That has stuck with me and helped me get my mom out of a bad situation with my brother......
 
Not having cable, i am unfamiliar with Suze Orman's program. By most accounts she seems rather off putting (the use of the words and phrases "girlfriend", "DE-nied" and "ain't happening" as quoted in Nord's article is enough to persuade me that I'm not missing anything worthwhile).

FWIW, I agree with her strategy - as summarized on this thread - of living off dividends and not touching principal. But that is not the ONLY approach to retirement planning, and one size can never fit all.

marc515 said:
IMHO the titles are a little misleading. I just don't see why the first one has the title "Suze Orman’s debit card does not support the troops"? Maybe I missed something in the article about our troops? The same goes with "Suze Orman disrespects the military again"; again, maybe I missed something, but I didn't see any disrespect there, only her advice indicating she didn't think it was a prudent purchase. Mr. Nordman apparently doesn't agree with Suzie, but to sensationalize his titles is just as bad to me.
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I read the articles. I too did not see any explicit or implicit disrespect for the military in the summary given of her advice to the retired woman. Similarly, it was unclear that she has suggested that the debit card product she sells is especially valuable or appropriate for service personnel; so accusing it of "not supporting the troops" seems over the top (a bit like claiming "Suze Orman's debit card does not support the fight against world hunger": technically true, but so what).

Poor choice of titles, but it is Nord's blog so he doesn't have to please anyone but himself. No harm done, I suspect.
 
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I watch her show fairly regularly and pay particular attention to the How Am I Doing segment. I find the accuracy of her information somewhat inconsistent. In that segment in particular I noticed a glaring error a while back. She used to show "home equity" in the person's assets and then their mortgage balance in their debts. That was double-counting the debt. She was telling people they were under water on their houses as a result! I emailed her because as a CPA I could not stand this bad an error being broadcast. I never received an email reply, but on the next show, the asset naming had changed to value of home or something like that.

I usually agree with her "grading" but sometimes that looks inconsistent too. This past weekend she gave the person an A for ability to retire in 4 years at 52 when they had a net worth of $400k including their house. Her rationale was that the person would have a pension of $3k at 52. She was single, but usually she insists that couples work till 70 and until they have a monthly retirement income of $10k. Still generally a good segment anyway I think.

I'm new to the forum, by the way, and will go to Hi I Am to introduce myself soon. I really enjoy it so far. Already I don't look at dryer sheets in the same way.
 
Her budget and debt payment discussions are fine but her investment insight is really poor. She keeps telling people to buy etfs and or stocks yielding 4-7%. But she never gets specific about which stock/etf to buy and risks involved. Nor does she mention anything about asset allocation, which is the most important part of investing. I am assuming she won't mention any particular name is because if she recommends Vanguard/Fido's products, other financial firms won't place ads with her show. But how will these people who call know what and which stocks/etfs to buy and how to buy it?

She also had a problem recently with an investment newsletter of some sort she was endorsing. After months of bad press she finally severed herself from the firm.

But have to agree her show is entertaining because some of the callers with their wants are really funny.
 
MBAustin said:
+1. Suzi and Dave keep more than a few people from falling over their own fiscal cliff and that's a good thing - both for them, and for us!
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After reading all the posts, I would say this is the one I agree with most. Everyone should periodically continue to watch this show, to reinforce the fact that we better hope SS stays around in it's present form a long time, or there are going to be a lot of people in big trouble. I bet there are way more of "those type" of people who ask if they can afford it, than "this type" that frequents this great forum.
 
Here are my two (legitimate) gripes about Suze's show:

1. "Monthly savings" are often listed under the the "expenses" category, for example when used for the purpose of calculating an 8 month EF (such as in the "Can I Afford It?" segments). Since when does an EF have to cover savings? :confused:

2. Her insistence that taking a 401k loan leads to double taxation when it has clearly been debunked.

I know some find her attitude toward her callers to be rude/condescending, but I think some people are such financial catastrophes that they need a rude awakening from someone like Suze. Dave Ramsey also gives the smack talk to his callers at times, and it really is no different.
 
hlfo718 said:
Her budget and debt payment discussions are fine but her investment insight is really poor. She keeps telling people to buy etfs and or stocks yielding 4-7%. But she never gets specific about which stock/etf to buy and risks involved. Nor does she mention anything about asset allocation, which is the most important part of investing. I am assuming she won't mention any particular name is because if she recommends Vanguard/Fido's products, other financial firms won't place ads with her show. But how will these people who call know what and which stocks/etfs to buy and how to buy it?

She also had a problem recently with an investment newsletter of some sort she was endorsing. After months of bad press she finally severed herself from the firm.

But have to agree her show is entertaining because some of the callers with their wants are really funny.
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how she pushes her audiance into believing because they are getting a dividend somehow stocks are less risky is nuts.

the darling of wall street DVY with its carefully selected picks of only the most screened dividend payers plunged 54% in 2008-2009.

im sure those that panicked and bailed were happy about the 3% dividend.

just buy dividend paying stocks can be dangerous advice for a public who is clueless and thinks she is god.
 
mathjak107 said:
how she pushes her audiance into believing because they are getting a dividend somehow stocks are less risky is nuts.

the darling of wall street DVY with its carefully selected picks of only the most screened dividend payers plunged 54% in 2008-2009.

im sure those that panicked and bailed were happy about the 3% dividend.

just buy dividend paying stocks can be dangerous advice for a public who is clueless and thinks she is god.
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Where do you get those figures for DVY?

iShares Dow Jones Select Dividend Index Fund (DVY): Performance - iShares
 
We can blame Suze for thread drift. Seems to me the interest on a 401k loan is indeed taxed again, per the following example: say my FIRE funds are $1 million in a 401k plus another $1 million in an after tax checking account. I take a 401k loan, then pay it back, paying $1 million in interest. Now my checking account has $0 and my 401k has $2 million, all of which is taxable. This process converted $1 million post-tax dollars into $1 million pre-tax dollars, setting the stage for those dollars to be taxed again upon withdrawal. Or, did I miss something?
 
GrayHare said:
We can blame Suze for thread drift. Seems to me the interest on a 401k loan is indeed taxed again, per the following example: say my FIRE funds are $1 million in a 401k plus another $1 million in an after tax checking account. I take a 401k loan, then pay it back, paying $1 million in interest. Now my checking account has $0 and my 401k has $2 million, all of which is taxable. This process converted $1 million post-tax dollars into $1 million pre-tax dollars, setting the stage for those dollars to be taxed again upon withdrawal. Or, did I miss something?
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I don't think you're looking at it properly. Let's change the scenario and assume you borrowed the money from a bank and paid it back at the same interest rate. How would you fare in comparison (don't forget that earnings in a 401k account is typically tax deferred, while those in a taxable account aren't)? I'm too lazy to do the math right now but the following link does look at it from a tax perspective:

Suze Orman is WRONG about 401k loan Double Taxation | Free By 50
 
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azphx1972 said:
I don't think you're looking at it properly. Let's change the scenario and assume you borrowed the money from a bank and paid it back at the same interest rate. How would you fare in comparison (don't forget that earnings in a 401k account is typically tax deferred, while those in a taxable account aren't)? I'm too lazy to do the math right now but the following link does look at it from a tax perspective:

Suze Orman is WRONG about 401k loan Double Taxation | Free By 50
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The relative merit of loans from various sources is a different issue. Resolving the double-taxation problem would be easy if the law allowed interest-free 401k loans. Borrowing from a Roth, rather than traditional, 401k does avoid the double-tax.
 
GrayHare said:
The relative merit of loans from various sources is a different issue. Resolving the double-taxation problem would be easy if the law allowed interest-free 401k loans. Borrowing from a Roth, rather than traditional, 401k does avoid the double-tax.
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I guess you are just not getting it.... I will try an easy example....

You have money in your 401... you buy a CD that earns 5% from the bank... at some point in time you will have to pay income tax on that 5%... But, you need money.... so you borrow money from that bank at 5%... you are paying after tax dollars in interest expense to that bank... you will never see that money again... you do not say "I am being taxed twice on the interest I pay".... you just pay it...


Now, take the bank out of the above example.... you lend yourself money at 5%... at some point in time you will have to pay income tax on that 5%... just like if you bought your CD.... no change to the above example.. But, because you need money, you borrowed it from yourself.. you are paying after tax dollars in interest expense to yourself... you will never see that money again...


The net result of the two examples are the same.... your 401 went up by the 5% and you had to pay interst on the loan you had... NO EXTRA TAX LIABILITY WAS CREATED... if no extra tax is due, you are not being taxed twice on the loan...
 
The bank example is not a valid/fair comparison unless I own the bank like I "own" my 401k. If I do indeed own the bank, and then pay loan interest to it, yes, I will be doubly taxed, just like I am doubly taxed on interest in the case of a loan from my 401k.
 
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