suze orman says....

[Nords]

The consensus here seems to be that Suze is not worthy of anybody's attention. I am not agreeing or disagreeing, but it is interesting that the topic has had 141 posts already.
She has gotten your attention, whether you realize it or not.

How about this clarification: She's worth some people's attention, but she's not worth everybody's attention.

I think her best use is teaching kids & teens about grownup money issues. The fact that so many grownups also need to learn her material indicates how many people should've been watching her as kids and teens.

By the time you know how to handle your money, you don't need Suze's help. By the time you're planning your ER, she's just an annoying background noise.

 

[Silver]

By the time you know how to handle your money, you don't need Suze's help. By the time you're planning your ER, she's just an annoying background noise.

"ARE YOU KIDDING ME?"
(said in my best Suze screech........)

I think she would be stunned to hear that anyone might think she is irrelevant.

 

[Rustward]

How about this clarification: She's worth some people's attention, but she's not worth everybody's attention.

OK. Clarification accepted. I sit here clarified. Thank you.

 

[GregLee]

Here's a recent article that makes the same argument (however, I'm still not buying the idea ):

The TRP article compares retiring "early" at 62 (including starting SS at 62) with retiring late at 70 (including starting SS at 70), and finds that it may be better to retire late. Or, wait!; maybe TRP is really arguing that it's better to start SS at 70 than at 62. Well, Duh.

 

[veremchuka]

I am not sure why there seems to be some animosity against Suze Orman on this board. Her explanations are clear to people (like me) who are not investment / finance experts.

Another thing no one mentioned is she does not like bond funds and preaches that you should buy individual bonds. This is ridiculous advice for the average person that does not have the financial ability to create a diversified bond portfolio. Having $25 million allows her to buy treasuries and not care, though that isn't all that diversified. I've read that you need $250k to do it correctly. Bond funds are an excellent choice for the vast majority of people.

Another thing that bugs me, but maybe not others, is that she always refers to herself in the 3rd person. Next to Howard Stern she is the most self promoting shill out there IMO.

 

[scrabbler1]

Another thing no one mentioned is she does not like bond funds and preaches that you should buy individual bonds. This is ridiculous advice for the average person that does not have the financial ability to create a diversified bond portfolio. Having $25 million allows her to buy treasuries and not care, though that isn't all that diversified. I've read that you need $250k to do it correctly. Bond funds are an excellent choice for the vast majority of people.

Another thing that bugs me, but maybe not others, is that she always refers to herself in the 3rd person. Next to Howard Stern she is the most self promoting shill out there IMO.

I agree. I have been invested in bond funds since 1990, when I started with a $3,000 investment, something I could not have done with individual bonds. I did not know back (or today) how to even go about buying individual bonds. Furthermore, the money in my bond funds is quite liquid. Between checkwriting privileges and electronic tranfers, I can get to the money whenever I want via check or wait a day or two for electronic transfer, something I find quite comforting.

I do happen to know what it is like to deal with an individual bond. My parents had a municipal (coupon) bond back in the 1980s which had a 15-year term expiring in 2000. For a while, my mom went to her local bank which redeemed the semi-annual coupon for a small fee ($5 at most) until the bank greatly boosted that fee to $25, annoying her quite a bit LOL. Just before she passed away in 1995, she figured out how to get the bond redeemed at no charge but only in person. Luckily for my dad, that bank was located near my office (I was still working, and in lower Manhattan) so every 6 months I would walk over there and present the coupon and my dad would get a check mailed to him. He needed to complete a form (W-9?) and I was able to get them beforehand to save time. When it came time to redeem the bond itself, he came to my office to visit and walked with me to the bank (a different one but still in lower Manhattan). We both found it a relief to be done with the bond, especially when my company moved to New Jersey a few months later.

My dad has bond mutual funds and he surely prefers having monthly dividends magically (and effortlessly) appear in his account instead of the ordeal he and I had to go through to get the bond's earnings.

 

[Nords]

Next to Howard Stern she is the most self promoting shill out there IMO.

Oh, great, I may have a high gross-out threshold but it's still going to take me a long time to get that "hot or not" image of Stern & Orman out of my visual cortex...

 

[mathjak107]

she drives me nuts when she keeps saying 401k loans are taxed 2x. clearly only the interest you pay is ,not the loan itself.

 

[veremchuka]

she drives me nuts when she keeps saying 401k loans are taxed 2x. clearly only the interest you pay is ,not the loan itself.

Gee I hate to agree with Suze and I know I've read that this is not true, tho I can't recall the reasoning behind it, I think you are taxed twice.

You pay the loan back with after tax dollars then when you take distributions you pay taxes on the distributions. From where I stand that's paying taxes on that loan amount 2 times.

While you can't segregate which dollars are the twice taxed dollars in distributions it seems pretty obvious you paid taxes on some part of it twice. I think 401k loans are a poor idea unless really needed.

 

[mathjak107]

only the interest you pay on a 401k loan is taxed 2x. nothing else is.

paying back a 401k loan is no different than if you took the money out of the 401k and decided the next day you didnt need it so you put it back.

your income is always taxed unless it goes into something thats tax defered . whether you take no loan, a bank loan or a 401k loan your income is always taxed.

all your doing is replacing untaxed money you took out. think about it in dollars and cents.

if your income is 50k a year that 50k is taxed regardless. no more ,no less whether you take a loan or not. the fact you took 10k of untaxed money out of your plan has nothing to do with your income taxes that year . your just replacing the untaxed money you took out . that money is still only taxed 1 time when taken out down the road.

i wrote her a few times and challenged her to show me at what point you paid more in taxes on your income tax with the loan vs without a loan. no response from her.

 

[mystang52]

My obsessive/compulsive side 8>) came out, so I had to work out the numbers and see for myself. I agree with mathjak. I just did a simplistic example and sure enough only the interest is taxed from previously taxed money.

 

[foxfirev5]

only the interest you pay on a 401k loan is taxed 2x. nothing else is.

i wrote her a few times and challenged her to show me at what point you paid more in taxes on your income tax with the loan vs without a loan. no response from her.

I wrote her as well a few years back when this started. No response. It's amazing that someone can continue to give misinformation. - However consider the network - CNBC. As others on this forum have suggested, watch CNBC, with the sound turned off.

 

[Major Tom]

From everything I've read about Suze Orman, I'm glad that I've never seen one of her TV shows. I did see the front cover of one of her books once, probably flipped through it and decided it wasn't my cup of tea.

When I first started learning about this stuff, I read a lot by Tom and David Gardner and the rest of the Motley Fool team back when their site was new. I also read a book by Andrew Tobias. I forget which title, but it was good general common-sense advice for those wanting to save and invest.

Suze Orman has never been relevant to me, and once I flag someone as not of interest, I tune them out. In some cases it's a bit of a character flaw, but in this case, I think it has served me well.

 

[mathjak107]

My obsessive/compulsive side 8>) came out, so I had to work out the numbers and see for myself. I agree with mathjak. I just did a simplistic example and sure enough only the interest is taxed from previously taxed money.

its simple... its no more than replacing what you took out . it has nothing to do with income tax. your income is always taxed regardless..

at no point do you pay anymore or any less in taxes because you took or didnt take a loan. your taxes that year are exactley the same.

 

[Beryl]

Bumping up the most recent Suze thread to rant. I watch her show weekly and agree with her most of the time - especially the 'Can I Afford It' advice. However, she has been on the 'work until you reach full retirement age (67-68 )' kick for too long. Yesterday, she referenced a letter from a viewer who complained about it. She then told the audience why she doesn't recommend early retirement (living longer, can't depend on home equity, debts, no pensions, etc.).

I went to website and sent her this:

I don't disagree with your advice for SOME people to work until they die or 67. However, some of us are debt-free, own our homes outright, have pensions, and substantial savings. We scrimped and saved so we could retire early and you neither encourage us nor give advice to others who desire to retire early. I take issue with this. I retired 8 months ago at 56 and I do believe that I can stay this way and even take SS at 62, if I want to do so.

 

[W2R]

Great response, Beryl! I like Suze but her constant repetition of the advice not to retire early seems a little odd. Maybe she is just too rich to relate to the common man, or woman.

 

[REWahoo]

Great response, Beryl! I like Suze but her advice not to retire early (ever) seems a little odd. Maybe she is just too rich to relate to the common man, or woman.

My take is her tough love approach to finances has hardened over time to curmudgeoness status: "You kids get off my lawn - and don't even think about retiring!"

 

[ls99]

Besides if most ignore her advice and RE. Who would be her audience?

 

[powerplay]

Besides if most ignore her advice and RE. Who would be her audience?

+1

 

[73ss454]

I think she is trying to justify her own working at a later age. If that's what she thinks and wants to do, well, have at it. In the mean time I'll be home relaxing.

 

[Nords]

Bumping up the most recent Suze thread to rant. I watch her show weekly and agree with her most of the time - especially the 'Can I Afford It' advice. However, she has been on the 'work until you reach full retirement age (67-68 )' kick for too long. Yesterday, she referenced a letter from a viewer who complained about it. She then told the audience why she doesn't recommend early retirement (living longer, can't depend on home equity, debts, no pensions, etc.).

Gotta consider the type of person Suze deals with. As Walt34 has said about the other end of the retirement bell curve, some of these people are just trying to survive the next year-- let alone get out of debt. Retirement isn't on their radar and they can't even spell ER. Suze loses nothing by pissing off our demographic.

Suze told the lottery winner ($3.5M after taxes) to pay off all her debts (mortgage, car loan, everything) and then set aside $300K for "whatever" (entertainment, kid's education, fantasy travel). Her advice for the remaining ~$2.8M was to "diversify" it by investing in municipal bonds. By "diversify" I think she means buying them in 40-50 states, but that wasn't exactly made clear. The only asset class, outside of cash in her checking account, was munis.

So this 40-something woman will be receiving roughly $140K/year in 5% bond income. Presumably she can quit her Costco job but that wasn't discussed either.

I think the main reason the lottery winner is satisfied with munis is because she's absolutely terrified of two things: (1) managing her own money, and (2) the stock market. She ended up on the Suze Orman show after her teenage daughter turned her in for fear that Mom would end up buying indexed annuities from the crowd of "financial advisors" that had gathered.

I'd love to hear a followup on this story in a few years. The winner was one of a group of 20 but there was no mention of what the other 19 are planning to do with their shares.

 

[mystang52]

If you watched Suze's body language during that rant about "everyone" needing to work until 67, and the shrillness of her voice, you can tell she takes it as an affront to challenge her. There was only one sensible thing she said - she referenced to people being under water and little to no savings, and for those people early retirement is not a viable option. But she made no allowance for people in better financial shape. She is way too full of herself.

 

[skyvue]

I think she is trying to justify her own working at a later age. If that's what she thinks and wants to do, well, have at it. In the mean time I'll be home relaxing.

I agree. She thinks if she is still working (and has millions in the bank) then everybody should. Problem is most of us don't have a job we "love" like she presumably does.

 

[Chuckanut]

I think a healthy skepticism regarding any of the TV celebrity figures whether in medicine, finance, love, relationships, etc. is warranted. At some point they cross the line from being a medical, financial.... professional to being an entertainer who needs ratings to survive and make money.

 

[Nords]

Suze is a wonderful tool for teaching personal financial responsibility to teenagers. We've had many productive conversations around the show, and "Suze's rules" are easily understood.

But someone whose message is attractive to teens is probably going to have a tough time connecting with the majority of an adult audience. She's getting them from the lower end of the bell curve, not the upper parts.

For those keeping track, Suze recently celebrated her 60th. In six or seven years it'll be interesting to see whether she decides to move on from the show or whether it's canceled out from under her.