In Praise of Suze Orman 64 comments
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The kind of people who read Seeking Alpha, Portfolio.com -- or, for that matter, The Big Money -- are not Suze Orman's target audience. You, dear reader, are likely an urban sophisticate; you're probably male; there's a very good chance you work somewhere in finance or the media; and when you ask questions about money, it'll be about something specific: the relative merits of index funds and ETFs, for instance, or the amount that mortgage rates have to fall before it makes sense to refinance. You probably think that trying to live on $40,000 a year would be a real hardship.
Suze Orman, by contrast, has a very broad appeal, although it skews very female. Her base is emphatically not urban sophisticates: instead, she talks directly to millions of people that the financial media never normally reach. To give you an idea of the difference in audience, the median US adult female earns $20,014 per year. Even when you look at women with bachelor's degrees, the median income rises only to $35,094. And yes, these women will, on average, raise 2.03 children.
Orman's audience is not necessarily stupid -- although they can and do make just as many boneheaded decisions as the rest of us -- but they're also not necessarily educated, and many of them lack even basic financial literacy: they have no idea what a percentage is, or an interest rate, or how to read a bank statement to work out how much you've been charged this month in fees. When they get promoted to supervisor in a call center, they're the kind of people who say that whether or not there's a difference between 0.2 cents and 0.002 cents is "a matter of opinion".
There are very few people who talk to these people and provide them with the financial basics; Suze Orman is by far the most successful, and for doing so she deserves medals rather than the kind of brickbats being thrown at her by James Scurlock in The Big Money.
Scurlock, from the beginning of his piece, clearly has no intention of treating Orman fairly:
How a bottle-blond former waitress and self-described "55-year-old virgin" with a taste for the good life became the financial messiah for millions of Americans might be a fun Lifetime original movie. Why the masses continue to invest their faith in Suze Orman in the wake of a financial meltdown she never saw coming is a more timely question.
Scurlock won't tell you that the "55-year-old virgin" quote is taken, out of context, from an interview in which Orman is quite open about her life-long lesbianism and the fact that she's been living with a woman for the past seven years. And yes, most people develop "a taste for the good life" once they've made tens of millions of dollars. But more to the point, Orman is not some kind of stock-market pundit whose job is to predict macroeconomic financial meltdown. She's a personal-finance guru whose job is to help women manage their household finances in a healthy manner.
Yes, Orman lards her books with no small amount of Oprah-level pop-psychology -- but when she does so, she's generally right. It's easy for the analytically-skilled elite of the information economy to scoff at such things, but something as basic as spending less than you earn really is akin to eating fewer calories than you burn: conceptually easy, but very hard in practice, especially when the world seems to be conspiring against you at every step. And succeeding in such matters requires a level of psychological discipline, while failing in them often has psychological causes.
Scurlock mocks Orman's statement that "you will never achieve a sense of power over your life until you have power over your money," but it's a great way of harnessing the imperatives of the otherwise largely destructive self-help movement and putting them to good use. As for "the stock market is like a pot of soup" -- that's as good a way as any to explain diversification. You want she should go into details of capital structure and limited liability corporate entities?
Orman's audience is struggling with money woes. That's true pretty much by definition: someone who has these things all worked out is not going to read her books. But it's also true that most of Orman's readers and viewers aren't going to declare bankruptcy: there's a huge terrain of financial difficulty between bankruptcy and health. It's simply obtuse to imply, as Scurlock does, that because most bankruptcies are caused by catastrophic events, the people who don't suffer catastrophic events and who don't declare bankruptcy are probably fine, on a financial level. They're not. Many of these people are in desperate need of financial help, and Orman is providing a very valuable service which America's financial institutions have every incentive not to provide.
Financial wellness is about spending less than you earn, being happy with where you are financially, and not being greedy. Orman fits the bill. Yes, she spends a lot of money -- but then again, she earns a lot of money too. In fact, she's set for life, which means she has no need to risk her money in the stock market. So she doesn't. There's no hypocrisy there, only common sense.
On the other hand, it's true that Orman says that if you need to see your investments grow, in order to be able to live comfortably in the future or provide a nest-egg for your heirs, then the best way of doing that is to reliably and consistently put a certain amount of money into the stock market every month. It's good, basic advice: she would never advocate trying to pick stocks, or time the market, or anything idiotic like that. And if you're investing a set dollar amount each month, then you buy more shares when they're cheap and fewer when they're expensive.
This is "dollar cost averaging", which for some reason makes Scurlock see red. He asks: "Since when does throwing good money after bad make you rich?", as though the alternatives -- selling stocks after they've gone down, or not buying stocks when they're cheap, or investing new money only during bull markets -- are obviously better. They're not: they're worse.
It's telling that Scurlock's criticisms of Orman concentrate overwhelmingly on her investment advice -- the one part of the large Orman oeuvre which might be relevant to most Portfolio.com readers, but also the one part which is probably least relevant to Orman's real audience. Orman is not some get-rich-quick shill: she basically peddles common sense, which is a commodity the country could do with a lot more of.
In this debt-addled country with its lapses into the unsustainable world of negative savings rates, the pressing problem facing most Americans is not the fact that the stock market has fallen 40% from its highs, but rather the fact that they owe more money than they can realistically repay. That's why Orman spends so much time on credit cards, and credit scores, and other aspects of the world of debt-peddlers. There are millions of Americans out there who fail to pay their credit card in full each month despite the fact that they have money in the bank to do so. There are tens of millions who have stock-market investments in taxable accounts alongside large consumer debts. And there are probably a hundred million or more Americans who are simply having a huge amount of difficulty living within their means, especially after taking into account their financial burdens.
Orman provides hope for these people -- an eminently sensible roadmap for the future -- in a quintessentially American demotic as opposed to the arcane language of the financial press. Not everyone who buys her books will end up acting on her advice: the temptation to borrow and spend is all around us, after all. But from a financial-literacy perspective, Suze Orman has made America a much better place than any other individual alive. Long may she continue to do so.
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This article has 64 comments:
ALL YOU HAVE TO HEAR FROM OL' SUZE IS THE INTERVIEW SHE GAVE TO CNN MONEY 6/19/2008. SHE RECCOMENDS EEM USO AND XME. THAT IS EMERGING MARKETS, OIL AND MINING ETFs. SHE IS THEN ASKED IF THOSE ARE BUBBLES. SHE GIVES AN UNQUALIFIED "NO, I THINK IT ABSOLUTELY POSSIBLE THAT YOU COULD SEE OIL GO TO $150 OR $160." THAT IS DIRECT QUOTE, I HAVE THE ARTICLE IN FRONT OF ME. THAT IS VERY IRRESPONSIBLE ADVICE. THE SHAME OF IT IS NO ONE HOLDS HER FEET TO THE FIRE ON IT. SHE HAS NO ACCOUNTABILITY. IF YOU LIKE SUZE YOU MUST BE AS STUPID AS SHE.
Sorry, I can't buy into the justification that her appeal is for middle income, women who can't think for themselves. Time to wake up.
Follow up point: anyone who is a sophisticate in these topics understands how much more financially effective it is for having a lifetime effect to teach financial competetence to 15-20 year olds rather than 40-60 year olds.
On Feb 11 03:41 PM Six wrote:
> SUZE ORMAN GIVES GENERAL ADVICE THAT IS OFTEN DANGEROUS. FOR EXAMPLE
> SHE TELLS PEOPLE TO NEVER USE A HOME EQUITY LOAN TO PAY OFF CREDIT
> CARDS BECASUE THEY CAN WALK AWAY FROM CREDIT CARD DEBT. THAT IS FINE
> UNLESS YOU DEPEND ON A CLEAN CREDIT REPORT FOR EMPLOYMENT. THAT IS
> MORE PEOPLE THAN YOU MIGHT THINK, EG NURSES THAT WORK AROUND NARCOTICS.
> SHE NEVER TEMPERS HER ADVICE, SHE LEAVES THAT FOR THE LISTENER TO
> FIGURE OUT AND AS YOU POINT OUT THOSE LISTENERS ARE NOT THE SMARTEST.
>
> ALL YOU HAVE TO HEAR FROM OL' SUZE IS THE INTERVIEW SHE GAVE TO CNN
> MONEY 6/19/2008. SHE RECCOMENDS EEM USO AND XME. THAT IS EMERGING
> MARKETS, OIL AND MINING ETFs. SHE IS THEN ASKED IF THOSE ARE BUBBLES.
> SHE GIVES AN UNQUALIFIED "NO, I THINK IT ABSOLUTELY POSSIBLE THAT
> YOU COULD SEE OIL GO TO $150 OR $160." THAT IS DIRECT QUOTE, I HAVE
> THE ARTICLE IN FRONT OF ME. THAT IS VERY IRRESPONSIBLE ADVICE. THE
> SHAME OF IT IS NO ONE HOLDS HER FEET TO THE FIRE ON IT. SHE HAS NO
> ACCOUNTABILITY. IF YOU LIKE SUZE YOU MUST BE AS STUPID AS SHE.
On Feb 11 04:01 PM Nick Waddell wrote:
> I agree with this article, Felix. Her style may be homespun, but
> America could have used more of this and less of the manic yelling
> "Buy Buy Buy".
Suze deserves credit for her message, while simple. Careful spending and borrowing is contagious. People are nothing but crabs in a barrel. You try to climb up and they want to pull you down. You try to save, and they direct you to spend, make you a carbon-copy wage slave. You try to diet, and you are urged to eat. Anybody with a voice for positive outcomes, like Suze, should be applauded. That said, practical people are SO boring! Vrrrooooom!
She's making money hand over fist under a facade of 'compassion' and 'helping those who need it' with advice handed out as though its charity...
She even has people "defending" her money making machine with articles.
brilliant.
What doesn't make sense is saying that she "blames the victim". She just tells people to take responsibility for their problems. Even if you go bankrupt due to illness, you will be far happier and successful if you try to correct the problem rather that waiting for others.
As the author notes, those who (write or wrong) consider ourselves above her advice do not need to be confronted by Suzy on CNBC or in other similar media. With her demographic (i.e., women under $20K), perhaps cable isn't her venue anyway??
Say! Here's a really good idea. Let's put Cramer and Suzy on their own channel. We can call it CSNBC. Cramer and Suzy all day long.
Excuse me, now, while I get back to the intelligent rants of some of the OTHER gurus on CNBC who want me to know that investing is for the long-term and I STILL should be allocated 75% to equities. At least I know to ignore Suzy and Cramer. These other guys and gals are DANGEROUS !!
"Live within your means"
Love it and learn it. You don't need anything else in life...
On Feb 11 05:00 PM rich c wrote:
> > Say! Here's a really good idea. Let's put Cramer and Suzy on their
> own channel. We can call it CSNBC. Cramer and Suzy all day long.
If only we had all lived within our means we wouldn't be in the mess we are in today - it is as simple as that.
(And I'm not a white-collar WASP man who works in finance or business, so maybe that is why I'm open to her advice).
If a former waitress can balance the books for this country better than all the MBAs and Wall Street big-wigs, then we really have to wonder who deserves the airspace and financial control.
Thanks for the good words for Suze Orman. The fact that you were compelled to provide them speaks volumes of the sad state of American culture. We are a nation of windmill-tilting critics who love to bash the people we don't personally find interesting, entertaining, or intellectually challenging. And for what? Aside from hearing ourselves talk, it gives us a sense of superiority. Not exactly something to be proud of, is it?
What has happened to civility and class? Everyone seems more interested in in-your-face, confrontational deprecations and self-congratulatory one-upmanship than in extending courtesies and graciousness. It has become fashionable to be snippy and snide. Rudeness is de rigueur.
Most days, I am ashamed of the tenor of the American conversation, and of the puerile mentality which guides it. Why are we not striving to foster and promote the best that human nature has to offer instead of the worst? Have we given up on that dream? Have we abdicated mankind's birthright to reach for the stars? Sadly, it seems that there are far more people reaching for the gutter. Our instinct for a higher nature has succumbed to our reptilian drive for narcissistic gratifications.
On Feb 11 06:16 PM RCA wrote:
> Why are we not striving to foster and promote the best that
> human nature has to offer instead of the worst?
> Jees Felix, wake up. Dollar cost averaging? Dollar cost averaging
> in an obviously declining market is suicide. If this market declines
> further (and it will) then settles into a long, painful and lingering
> "L" recovery (and it will), those misinformed dollar cost averagers
> will be the last ones employing desperation selling. No one sensible
> condones DCA in this kind of market.
This is probably the worst "advice" I've heard so far. Your statements imply a certainty that nobody has. Sure, I think we're headed for a Depression and things will get worse, but would I bet the farm on that opinion? For those who don't have the time to read Seeking Alpha and countless other sites, DCA is a perfectly acceptable investment strategy.
It's better than telling an unsophisticated person to stay in cash and assume they will somehow know when the perfect time is to put that money back to work. Knowledge neither you, I or anybody on this site has.
DCA, kinda like Asset Allocation and MPT are designed to take emotion and guesswork out of the picture. It's a method of investing where you admit you don't know when things will get better, so you start investing a little bit over time rather than foolishly think you can time the market perfectly and the market will somehow let you know when it's safe to get back in. The news will be the very worst when it's time to get back in, which is a perfect case for DCA.
On Feb 11 06:16 PM RCA wrote:
> Felix,
>
> Thanks for the good words for Suze Orman. The fact that you were
> compelled to provide them speaks volumes of the sad state of American
> culture. We are a nation of windmill-tilting critics who love to
> bash the people we don't personally find interesting, entertaining,
> or intellectually challenging. And for what? Aside from hearing
> ourselves talk, it gives us a sense of superiority. Not exactly
> something to be proud of, is it?
>
> What has happened to civility and class? Everyone seems more interested
> in in-your-face, confrontational deprecations and self-congratulatory
> one-upmanship than in extending courtesies and graciousness. It
> has become fashionable to be snippy and snide. Rudeness is de rigueur.
>
>
> Most days, I am ashamed of the tenor of the American conversation,
> and of the puerile mentality which guides it. Why are we not striving
> to foster and promote the best that human nature has to offer instead
> of the worst? Have we given up on that dream? Have we abdicated
> mankind's birthright to reach for the stars? Sadly, it seems that
> there are far more people reaching for the gutter. Our instinct
> for a higher nature has succumbed to our reptilian drive for narcissistic
> gratifications.
>
We need to collectively rise up in so many facets of our lives and in our community and it is refreshing to see a real adult point this out. You may not like her style and she may be extolling basic financial information but I do agree that she provides an essential service. How American schools do not teach these things is criminal.
This is by far the best kind of market to DCA. If it drops further, I will double-down.
On Feb 11 03:59 PM kellyj wrote:
> Jees Felix, wake up. Dollar cost averaging? Dollar cost averaging
> in an obviously declining market is suicide. If this market declines
> further (and it will) then settles into a long, painful and lingering
> "L" recovery (and it will), those misinformed dollar cost averagers
> will be the last ones employing desperation selling. No one sensible
> condones DCA in this kind of market.
On Feb 11 10:11 PM Ricard wrote:
> I've DCA'ed beginning September. I am currently up slightly while
> the market tanked nearly 20% during the same period.
>
> This is by far the best kind of market to DCA. If it drops further,
> I will double-down.
Didn't know she was a virgin, by the way, nor that she was gay. (Couldn't care less in fact)
Outstanding.
Regarding dollar cost averaging, its good in the fact it tells people not to dump all your money in at once in one gamble but it is still simplistic and I don't subscribe to it. Each individual investment decision should be weighed independently and with logical consideration.
Anyway, her prescribing the dollar cost averaging technique and buy and hold strategy is no different than the 95% of securities advisors touting the same concept.
It is good someone is trying to teach basic fiscal restraint and budgeting to the common person. She may get some things wrong but at least she tries and at least she's not trying to rip people off taking a 1% commission or run a hedge fund.
You can debate whether she is deserving of the attention she gets or not. But it would be live debating wether the guy on Survivor deserves a million dollars or not. It's show biz. If it was not her it would be another spokesperson touting basic ways to save and budget.
And taojaxx I'm with you 100% on the fact that her sexuality has nothing to do with this matter at all. Anyone bringing up such stuff is juvenile.
The caller tells her what he is thinking about buying, then tells Suze what his mortgage, bills, paycheck are-- and she tells him (or her) whether he can buy it or not. Sometimes, the caller gets a mini-lecture. (Regardless of Suze's decision, the caller usually says "Thank you", which is the only redeeming 2 seconds for either party).
In fact, the first time I saw that part, I thought it must be some sort of spoof-- like a Monty Python sketch, perhaps.
Sadly, it was no spoof. But it is a poignant reminder of why we are in the current mess.
To be frank, I still try to help teach my sons--both about 30--to persevere with these foundational themes. To that, they then must add investment strategies that will help them build some wealth to cover major future expenses whether college costs for their kids, retirement, or a nest egg for their children, as well as the occasional indulgence, like an expensive vacation. These might be called main floor investing.
Many of Orman's critics, as Salmon rightly points out, are involved in upper floor investment strategies (options, hedging, technical trading, etc.) of one kind or another, many of which don't work or work only for a short time. They require an extensive understanding of economics, finance, and markets, and even few of the participants have this understanding or the intense focus and intellectual capability to be successful. Unfortunately, a fair number of people engage (and fail) in these investment strategies, all the while spending as if they will always succeed, and without having established the foundations and primary investment strategies mentioned above.
Orman provides lesson #1 in household finances. Other lessons should not be taught until Lesson #1 is firmly locked in as a personal habit.
On a sidenote, I wonder if Suze and Cramer have ever considered a celebrity wrestling match? Cramer would no doubt be favored going into the bout, but he's easily distracted.
On Feb 14 05:43 AM Daniel Herkes wrote:
> We have all of her books. My wife has read them. I'm happily married,
> and so I listen to my wife. Ms. Orman makes sense at the level
> of "advice to consider, while evaluating all of the possibilities."
> The resale shop is full of her books, si it has been inexpensive
> advice.
On Feb 12 02:58 AM Alex Salkever wrote:
> pay me a bazillion bucks and put me on Teevee?
On Feb 11 03:59 PM kellyj wrote:
> Jees Felix, wake up. Dollar cost averaging? Dollar cost averaging
> in an obviously declining market is suicide. If this market declines
> further (and it will) then settles into a long, painful and lingering
> "L" recovery (and it will), those misinformed dollar cost averagers
> will be the last ones employing desperation selling. No one sensible
> condones DCA in this kind of market.
- the price of stocks and homes tends to rise faster than their true value, and
- the purchasing power of paper currency is changing slowly and at approximately the same (inverse) rate as incomes, and
- interest rates are significantly positive, both to borrow and to lend.
Notice that this describes typical conditions in the developed world between 1950 and 2000. In other words, nearly everyone now living has adjusted their basic financial assumptions to these conditions. So it's not surprising that Orman and others who provide financial advice to mainstream individuals bases that advice on this set of fundamental assumptions.
Unfortunately for people who take that advice, the past 50 years are anything but ordinary, especially for Americans. Being a citizen of the world's single dominant military and economic power at a time when the above assumptions mostly held true is an historically exceptional experience. A far more typical lifetime includes periods of war (in which losing in a way that forever alters one's lifestyle is a real possibility), hyperinflation, depression, and so on, intermixed with occasional booms and peaceful interludes. The sheer size and liquidity of today's developed-world financial markets is itself an exceptional result of an exceptional period of political, military, and economic stability.
Some of Orman's advice is timeless: spending less than you earn is probably correct at least 95% of the time, no matter where you live or what you do. Most of the disagreement seems to stem from what one ought to do with the surplus, but most of the disagreement fails to question the fundamental underlying assumptions I mentioned above. DCA haters, for example, would prefer to cut their losses and avoid holding all the way to zero. That may make sense for particular individual stocks, but it also assumes that the holder will invest that money elsewhere and that the alternative investment will perform better. Is that a good assumption? If the investor has a long-term winning track record, the best we can say is "maybe". Orman's audience can't say that; if anything, they're likely to make the same mistakes repeatedly, racking up both losses and fees. They're probably better off just indexing. Given that, is selling at a loss sensible? Well, again, that depends on your assumptions. I don't see a lot of DCA haters saying that $SPX is going to zero, nor do I see them telling anyone where money ought to be instead of SPY.
The problem here is that in order to provide good advice, you need to have a reasonable understanding of what the economic universe is going to look like for the next 30-75 years. No one does, of course, but we can make reasonable assumptions and act on them. The most reasonable assumption to make is always "reversion to the mean." But when an advisor born in 1950 thinks about "the mean", he or she is making a lot of assumptions based on a truly exceptional period in history. The cold reality is that "the mean" is very mean indeed. When one looks beyond the borders of the United States, or farther into history, it becomes clear that our three assumptions are very rosy indeed. A second observation takes on some importance as well: our assumptions haven't been very correct for the last 10 years, either. A decade is a long time to be violated for assumptions based on only 50 years of observation. How confident can we really be right now in our thinking about what constitutes "the mean"? Put another way, how confident are we that avoiding debt, saving US dollars, investing some of them in equities, and DCAing into those investments is a sound strategy? That strategy worked spectacularly well from 1950 to 2000. It would not have worked very well at all from 1900 to 1950: several devaluations (some stealthy), a depression, and two world wars made for a rocky experience and a modest outcome in real purchasing power terms.
I could not in good conscience advise a friend or client to pursue that strategy today, or more precisely, to pursue it exclusively. Owing dollar-denominated debt is probably very wise right now. Load up; borrowing is cheap and the dollar doesn't pay any interest so saving is a waste of time. If you end up in bankruptcy, so what? The government will bail you out. Incomes have been falling in real terms for quite a while now; working is less rewarding than ever, and widespread unemployment isn't going to help. That midlife crisis induced year off living the Bohemian dream in Europe isn't really a bad idea. And US stocks are plenty risky - in addition to ordinary global economic risk, you've got political risk (confiscatory policies), interest rate risk (how are these 3% yields going to look when 10-year interest rates rise, even only to the "mean" of 8%?), and especially currency risk. There are an awful lot of dollars being printed right now, and there's no real incentive to hold them. It's entirely possible that these risks won't be borne out in reality, but they look real today and stocks aren't particularly cheap. I don't advocate zero exposure, but if your financial plan relies on a 10% return, year after year, it's not your investment mix that needs reexamining, it's your plan. You're going to have to learn to make do with less. Given your probable skill set and real value to the world economy, that's probably just reversion to the mean. In most cases, individuals who have been working and saving in US dollars for a long time would do best to cut most of their losses and stick what's left in gold. It won't make them any money, but it will protect them from most of the risks - risks that they lack the expertise and experience to evaluate. It will also protect them from the ill-advised actions of their government. That's something anyone from Myanmar or 12th-century Europe would understand intuitively in ways most Americans alive today simply cannot grasp. The good times are probably ending, as good times always do. Pretending otherwise is suicidal.
Expecting more "so called gurus" to write more books on "how to survive the crash".
I'll write with this title ; "How to profit from this crash, have more sex, play more golf, and look great".
Advice #1: don't buy crap off of home shopping channels.
Simply, she's exploiting those financially illiterate, desperate, ignorant people she's feigning to care to help. Why isn't she just selling her books and videos the normal way without an extra 50% "shipping and handling" markup?
Not only is she a joke, the channels that let her spew her worthless "you have to have the courage to succeed" blather need to jump off the cliff that her listeners just fell off with her "approved" investments. Hey Oprah...if you are going to push her why didn't you take her advice and throw your billions into mutuals over the past 3 years?
Sorry, I just hate institutionalized acceptance and validation of a financial retard.
Who do you think is looking out for you more, Suzy or your broker? Suzy tells it straight up. Your broker tells/sells you what will get him/her paid. Check your statements. I bet you lost a bunch. But your broker still got his cut(although a lot less).
Suzy may not get it all right, but then again her advice is free. And probably sounder than your broker. Have you bought a loaded fund lately from your broker?
1. She's telling them to save money and get out of debt. That's what America and Americans need right now - to stop spending more than we earn and to build up a base of savings and investments.
2. She's telling them to invest in the stock market and be disciplined about using the advantages of dollar cost averaging during difficult times. Disciplined long-term investors who invest indiscriminately in index funds and mutual funds are what you and I rely on to help keep a floor on stock prices.
So as much as you personally may not need Suze Orman's advice for yourselves and few of us really bother to heed her advice because it may not apply to them, it's important to recognize her contributions.
However, when she dabbles in other fields, it becomes clear that her knowledge has its limits. While the basics of personal finance are key to any successful investor, they are not synonymous with developing an investor's acumen. I would advise any of my friends that have yet to save a dime for retirement, or would like to know if they should open up what type of account, or ask what the difference between a 401K and a Roth IRA, to pick up a book by Suze Orman to get the lingo down.
When it comes to stock picking, macro-economic trends, Fed policy, and other investment affairs, there are much more credible authors than Orman. The learning curve also becomes much steeper at this point.
However, when she gets into the deeper end of the pool I'd not be inclined to follow her example (or advice).
Just because she tells folks to get out of debt (really, I didn't realize that!!!) doesn't begin to come close to solving the problem of debt which is really a income problem more than a debt problem.
For those of you that think our country has whole sale personal debt problems you might want to look at the real facts. The vast majority of folks carry a reasonably small amount of debt that is only a problem when they lose a job (like in recessions). Orman, Ramsey, etc. are preaching falsehoods for their own benefit and I see no moral rightousness in this.
On Feb 11 03:17 PM raising4daughters wrote:
> The country would be much better off if people like Suze Orman and
> Dave Ramsey were calling the shots instead of blood-sucking Wall
> Street "titans" going to Washington through a revolving door. Paulsen
> and Geitner should be arrested, not paid.
2. Not all viewers are retail-slaves making 20k; I am a well-positioned, conservative, new retiree (ex-JPMChase) who has largely escaped the financial meltdown by using my head and doing my own thing - which includes gold bullion coins. I enjoy listening to bone-heads get simple, practical, and MORAL advice, which is in very short supply nowadays.
3. You want a CNBC drone-head? Listen to Carmen Wong Ulrich. Cute, straight, dumb as dirt.
4. My gaydar says she is femme-on-the-streets, butch in the sheets.
1. Salmon: "they [Orman's female viewers] have no idea what a percentage is, or an interest rate, or how to read a bank statement to work out how much you've been charged this month in fees"
I take issue with this arrogant generalization. First of all, Orman's show began long before the current recession altered the focus of so many of her callers' concerns. Secondly, people who are so illiterate they cannot even balance a checkbook — which is what you also imply when you say they don't comprehend percentages and can't read a bank statement — are traditionally not the folks calling in on Suze Orman's "Can I Afford This?" segment. Generally, Orman's callers present as quite solidly upper middle class, which in turn suggests that her callers occupy decent paying jobs due to a degree of specialized knowledge or education that is at or above average. These callers are typically people who have a number of investments and/or savings. In contrast, Orman doesn't take many calls from working class immigrants with grade school educations working two or three menial jobs with questions on how to interpret what they earned on an investment or how to "plan" for their old age. Working class people understand that they will either work until they drop or bank on their children for their welfare in old age. Those who work the hardest for their bread & butter are too busy making ends meet to read your website or watch Suze Orman's show.
With much of the Middle Class Dream migrating to Asia, and China and India in particular, anyone with any sense at all realizes that The Golden Years mythos stems from a bygone American era. The only saving grace for the downwardly mobile American Middle Class is that economic trends have a way of self correcting. In the end, what hurts the little guy's pocketbook will come full circle to hurt the big guy. Wall Street can only remained decoupled from the fate of the American worker for so long before the discrepancies begin to catch up.
As American spending power declines and federal and state taxes go up to compensate for the unemployed by virtue of their increasing rate of bankruptcy and dependence upon social services, the entire economy will be depressed. Will Americans purchase as many sporting, concert, theater tickets and the like? Will they shop at high-end retailers or purchase big-ticket durable goods? Will they "stimulate" the housing market? Will they send their kids to college or will the next generation charge out of the starting gate of life more debt-strapped than their parents? Meanwhile, will the next economic "bubble" develop in Asia, with disastrous results for a globalized model in which putting all of one's eggs in a single basket is a perceived wisdom? Will the pendulum of economic thought — once overly protectionist, in recent decades recklessly codependent — come back to center by as sober minds prevail?
By Orman's own admission earlier this year, Americans will struggle through 2015 in the slowest "jobless recovery" yet on record. More recently, we are hearing rumblings that high unemployment rates are the "new normal". The powers that be have declared the recession over without regard for the realities on Main Street USA. Why? Because trade and tariff policies in recent decades — seemingly initiated by President Nixon's idea to pacify the communist threat in China rather than fight it as we did in Vietnam — have eviscerated the American Middle Class. Federal government debt servicing policy favors cash infusions from foreign bondholders, upon whom the Federal government depends for its own decades-long quasi "stimulus".
Now those foreign investors have other plans. Plans to de-peg foreign currency from the dollar are underway, a move that will surely be the final nail in the coffin of the American Dream as the present generation has come to understand it. Just how long can Wall Street go on performing when the game has shifted abroad? Here's an idea for you: Why not shut down Wall Street entirely and relocate the entire operation to Asia where Middle Class aspirations are fresh, new and increasingly more attainable than ours?
2. "You, dear reader, are likely an urban sophisticate; you're probably male; there's a very good chance you work somewhere in finance or the media…"
As someone with a media background, I challenge Salmon's notion that media players are generally "urban sophisticates" (well off). The vast majority of those who work in media are middle class, if that. Again, a gross generalization. Few who write for a living, save the Dan Browns, Stephen Kings and J.K Rowlings of the publishing world, make the sort of money you seem to imply your average reader here has. Perhaps instead of "media" you are, in fact, referring to are the quasi celebrity pundits with radio and television shows. Ah, but remember: Dan Rather was hung out to dry over unfounded Bush-era documents he reported as fact on a newscast. Most people, you see, fail to realize that at the top of the media food chain, celebrity or otherwise, you are a talking head. Other people conduct your research. Other people check your facts — if at all. You are there for your "riveting personality" (ratings). Hard news reporters who don't have cult followings and who don't style online newspapers after themselves — e.g. the "Huffington Post" — don't earn that type of money. Like so many other industries, the people who work the hardest in media are recognized and paid the least even though they too, in many cases, have earned college degrees in order to occupy their not-so-enviable spot in the economic food chain. Salmon, you have lost touch with the real world. Unless writing is only a part-time gig and not your "real job", I highly doubt you can brag any more than most writers can. Not so fast…