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Old 12-11-2012, 10:31 AM   #61
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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.
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Old 12-11-2012, 03:32 PM   #62
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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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Old 12-11-2012, 04:08 PM   #63
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+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!
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.
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Old 12-11-2012, 05:49 PM   #64
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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?

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.
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Old 12-12-2012, 12:05 AM   #65
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I have listened to her a few times only but I have leaned something new every time. Have been thinking of buying her kit:
Suze Orman - The Suze Shop : Collections & Kits=

Quote:
Originally Posted by marc515 View Post
I'm sure many folks who read this forum could learn a thing or two from Suzie.
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Old 12-13-2012, 03:59 AM   #66
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Originally Posted by hlfo718 View Post
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.

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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Old 12-13-2012, 01:29 PM   #67
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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.
Where do you get those figures for DVY?

iShares Dow Jones Select Dividend Index Fund (DVY): Performance - iShares
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Old 12-13-2012, 02:44 PM   #68
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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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Old 12-13-2012, 02:47 PM   #69
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Or, did I miss something?
You missed this debunked link from AZ above.
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Old 12-13-2012, 02:55 PM   #70
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You missed this debunked link from AZ above.
Actually I believe I debunked that debunk: it overlooks the loan interest.
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Old 12-13-2012, 03:10 PM   #71
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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?
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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Old 12-13-2012, 03:23 PM   #72
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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
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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Old 12-13-2012, 03:39 PM   #73
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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.


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...
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Old 12-13-2012, 04:23 PM   #74
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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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Old 12-13-2012, 04:28 PM   #75
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One more explanation:

401(k) loans: Are you really taxed twice? | Vanguard Blog
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Old 12-13-2012, 04:58 PM   #76
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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.
No, it is exactly the same... at the end of the day your 401 made interest income and you paid interest expense.... the only difference is who paid the interst income to the 401 and who you paid the interest expense to.... but since you do not want to see it that way... have a great day...


PS... in your example of interest free loans.... yes, you are then taxed on the interest income you pay to the 401.... but then you got a BENEFIT from that money that you are not supposed to get.... forcing you to pay interest on that money removes that benefit....
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Old 12-13-2012, 06:33 PM   #77
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No, it is exactly the same... at the end of the day your 401 made interest income and you paid interest expense.... the only difference is who paid the interst income to the 401 and who you paid the interest expense to.... but since you do not want to see it that way... have a great day...

PS... in your example of interest free loans.... yes, you are then taxed on the interest income you pay to the 401.... but then you got a BENEFIT from that money that you are not supposed to get.... forcing you to pay interest on that money removes that benefit....
Yes.

If you took out $10k from your 401k and the next day you realized you didn't need it and paid it right back with that same money you would not be taxed on it. If you bought a car with that 401k money you would not be taxed on it (unlike buying a car with a conventional loan and making those payments with aftertax money). The Vanguard explanation is clear imho.
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