Categorized | Financial Planning, Life

Suze Orman – Not Equipped to Educate Us?

I recently read an article in the NY Times Magazine on Suze Orman. I know this wasn’t her intention, but I walked away from the article thinking she was a fake.

I never had positive or negative things to say about her, I just knew she was like an “evangelist propagating her financial epistles” which unfortunately happens to be one size fits all. But, now I have negative things to say.

Hasn’t Walked the Walk

ontheledge

I respect everyone who follows what they preach; people who talk the talk AND walk the walk. There are plenty of financial bloggers out there who are doing just that. I respect all of them whole-heartedly. They make their income, save what they can, and pay off debt.

However, how can Suze Orman truly understand the plight of the everyday man and woman when she really doesn’t know how to pay off debt in the sense of sacrificing day in and day out for five years or more to pay off little by little?

As taken from the NY Times Magazine article:

“As soon as I started to tell the truth, and everyone knew what the situation was,” she said, “the phone rings and it’s Pacific Gas and Electric having another early retirement.” The company hired Orman to advise its employees, and “in one month I got a check for $250,000 and went, ‘Oh, my God,’ and paid off all my debt. I started getting checks like that again, and my whole life turned around.”

How many people can just start telling the truth and wind up with a $250,000 check to pay off all of their debt? No one that I know.

But, Suze Orman is just so quick to judge and ridicule, isn’t she? I would place a lot more authority on her advice had she worked diligently at paying off her debt and not done it in a way that 99.99% of people won’t ever get the chance to do. I don’t blame her, so don’t walk away thinking that. But I think it takes away from her ability to claim herself as an authority figure on debt repayment.

Complete Disrespect of Teachers

chalkboard

I have a great respect for teachers. You may call me biased because my aunt, sister, girlfriend, and a lot of my other family and friends are teachers, and that is fine. Everyone is biased to some degree. But, I think I can outright call Suze Orman an idiot for this opinion.

She has been reluctant to work on school curricula on personal finance, because she says students can’t learn empowerment from people who aren’t empowered, and teachers, she says, are too underpaid ever to have any real self-worth. She told me: “When you are somebody scared to death of your own life, how can you teach kids to be powerful? It’s not something in a book — it ain’t going to happen that way.”

Well, Suze, tell me: If students can not learn personal finance from people who have learned to live on an income close to the national average, please tell me, how can they learn it from someone worth over $20 million who only got out of debt by receiving a $250,000 check from PGE?

If anyone is in a position to teach people about finances, it sure isn’t someone who was placed in lucky circumstances. It is people who know the value of service and contribute to their community by teaching the youth of today (our future). These are people who make $40-60,000/year who have learned to survive on that salary.

I never knew that Suze Orman defined empowerment as being wealthy.

Hypocrisy at it’s Finest

If you called in to the show and told Suze that you were planning on buying real estate and had two options:

  1. Nice 1,300 sq ft condo for $x
  2. Nice 1,300 sq ft condo 5 miles away for 3 times $x;

Something tells me she would be adamantly against option #2. However, what did she and her partner do?

With her partner, Kathy Travis, she bought an apartment at the Plaza in Manhattan in late 2007 — paying top dollar near the peak of the market — but their apartment is in other respects quite modest: a 1,275-square-foot one-bedroom in which they installed a Murphy bed.

Why get a modest apartment in a top dollar area? Is that not wasteful nonetheless? Why not get a modest apartment in a modest area? New York City has a great mass transit system so being 5 miles away keeps you just as connected.

Also, Suze Orman often states that the only way to free yourself of debt is to be honest. However, in the NYT Magazine article linked above she is presumably caught in a lie. In a previous book she discussed how her father passed away. In the article she mentions how he committed suicide and was essentially giving up. When confronted she said she probably made it seem more peachy in the book for her mother. Honesty, Suze, honesty.

Too Much Emphasis on Money

I am huge on balance. Without balance, in my opinion, you wind up an empty shell. Too much money and no heart, you are a pain to be around. Too much heart and no money, you just can’t afford to “be.”

What does Suze think?

But she also wanted them to know that “money is kind of just like air — if you don’t have air, you can’t breathe. If you don’t have money, I don’t think you’ll want to breathe — you won’t want to live.”

Money is like air? I can agree that money is essential in some respect. But I don’t think that is the purpose of the simile.

Even if I was broke, I would like to think that I have the presence of mind that I still have self-worth.

I am not defined by my money.

He had escaped the fire safely once, untouched. Then he voluntarily risked his life and was severely injured. The money was that important. That was when I learned that money is obviously more important than life itself.”

And if that is the lesson she got from that event with her father, I feel bad for her. My first thought when I read the recollection of this event was “Wow, that is so unfortunate that he risked his life and could have widowed his wife or orphaned his children for money.” What do you take away from that event? Hopefully it isn’t the same conclusion that she reached.

Do not risk hurting other people or yourself or trading happiness for money. No amount of money can correct those mistakes.

Like Peddling Salads at Burger King

burgerking

I understand that everyone needs to eat. And Suze Orman is no different. I have no issue with her making money on her work, obviously. Just like I think it is only natural that bloggers put up ads or sell affiliate services to make money on their hard work.

Google Adsense is harder to control, but when I see an ad I think is questionable I try to block it. However, when it comes to affiliate programs I never recommend something I have not tried or heard great things about. ING Electric Orange? I use it and recommend it. Turbo Tax? I have used it for the past six years and it makes things very convenient in my opinion. TrustedID? One of my past employers lost confidential data and got all of the employees a free trial to make sure our credit was safe.

So my problem with Suze Orman in this arena?

[…] Orman said to The Chicago Tribune a few years back, when she was criticized for shilling a zero-percent-interest campaign for General Motors in a television ad that ran for a few weeks. Critics charged that she was compromising her objectivity (and that she hurt her credibility by implicitly endorsing the purchase of new cars, which she, like most financial planners, characterizes as a money-losing proposition). “You think they don’t know I was paid to do the G.M. commercial?” Orman said of her viewers. “I’m not in this for charity. This is a business, and anybody who thinks that it’s not a business is an idiot.”

and

Granted, every time she appears on QVC, Orman is probably selling to some people who have trouble with debt; selling kits on QVC about how to improve your credit rating is a little bit like being the in-house nutritionist selling salads at Burger King. Critics say Orman sells products like the $48 FICO kit on QVC to the people who can least afford them.

I am sorry if you built up trust with me as a viewer so I thought anything you recommended was actually in good faith. Whether it is a business or not, I think you should stand by the product you sell. Just as I won’t sell ad blocks to pay day loan providers, Suze Orman should not do commercials for things she does not vouch for. Is she not making enough off of the book deals and $80,000 per speaking event?

What Others Think

If you want to get included on these Twitter question/answers, follow me @MyLifeROI.

  • @mapgirlstc Love Suze’s books, but I cannot stand her TV show. I think she makes a lot of sense and has a message that ppl need to hear.
  • @GetOutOfDebtGuy Suze – I’d love to see more compassion and understanding for debtors and less spanking.
  • @stephonee I like that people listen to her (her advice is pretty good for a “guru”) – many people need that “tough love” approach
  • @Green_Panda While Suze’s young, broke, and fabulous was a good starting guide. Wish she ran numbers a bit more like ramit.
  • @MoneyEnergy Suze: oversimplified finances good for those who don’t figure it out on their own but not someone whose advice I’ve found useful.
  • @The_Weakonomist Suze is smart and energetic, like Ramsey she’s not perfect but is a good motivator and teacher.
  • @jeffrosecfp RE: Suze Orman. Great entertainer, sometimes question some of her logic and contradicting view points, but some is good…some
  • @TheHappyRock I don’t particularly connect with her or her advice, but I think she has been empowering for a lot of women with regards to money
  • @ManVsDebt She has awesome story, very hard working, however I personally don’t feel connection, don’t enjoy advice, have better options.

What Do You Think?

You have heard what I think. And you see what other bloggers think (in 140 characters), so what do you think? Am I being too hard on her? Or not hard enough?

Get to know the author!

MLR is passionate about saving for his future while maintaining a high quality of life. He currently resides in a great town, has a wonderful girlfriend, adopted the cutest puppy ever, and works for a Fortune 500 company.


has written 204 posts on MyLifeROI.com.


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29 Comments For This Post

  1. RateNerd Says:

    I don’t love Suze (especially her hair), but she does provide basic entry level advice for folks who have never been exposed to it before. Folks reading your blog are well beyond her. I do feel that her revolving door of endorsement deals will cause her to lose credibility, just like when Bob Vila started plugging every product under the sun.

    RateNerd’s last blog post..What To Do If You Need Help To Pay Your Mortgage

    [Reply]

    MyLifeROI Reply:

    @RateNerd,

    Haha, ditto @ the hair. I agree her advice is sound… sometimes. It seems to depend what day or hour you are listening to her. And that is what makes her dangerous for the unknowing listener… they may just take her advice as gospel.

    She does need to calm down with the endorsements. REDUCE SPENDING!! (unless you are buying Suze Orman branded items!)

    [Reply]

  2. AG Says:

    Congrats for reaching the “100 Posts” milestone MLR, keep up the good work :)

    Very nicely researched & well written article. I’ve not read Suze’s book but have watched some of her TV shows, she is energetic and knowledgeable but at times attempts to make things sound simpler and implicit than what the reality is. I believe in keeping the gravity of things so people learns to handle those situations.

    The “teacher” example you gave above, absolutely not good on her part.

    [Reply]

    MyLifeROI Reply:

    @AG,

    Thanks! My blog overall is over 100 due to guest posts, but I personally reached 100 with this post. Hopefully I did myself justice :)

    I can understand the “making it simpler” part as she only has limited time to explain things on the air. The article mentions that she often times contacts the callers after the fact and gives them a little better advice. So that is good on her part.

    In regards to the teacher comment, I think it is downright disgusting that she would say that.

    [Reply]

  3. HerLifeROI Says:

    Wow @ teachers having no self-worth. That would be just another example of her overemphasis on money. It’s clear that hardly any teacher takes the job for the money, and does it instead out of love and respect for the profession and for the fullfillment it (sometimes) offers. I think that speaks a lot more to self-worth than a bloated paycheck.

    Of course, I’m just a biased teacher though :)

    HerLifeROI’s last blog post..Suze Orman – Not Equipped to Educate Us?

    [Reply]

  4. Mike Leone Says:

    Suze’s financial advise seems mostly sound to me. But I get really irked watching her. If I have to hear her call someone “girlfriend” or “boyfriend” one more time … Now, both she and Dave Ramsey will tell a caller when the caller is being, or has been, stupid. That’s fine. I spend most of my time being stupid. But there’s something more irritating when Suze does it, than when Dave does it. That’s probably just a personal reaction (the same way her excessively bright, glow-in-the-dark teeth get on my nerves …). I do like that “People first, then money, then things” mantra of hers, tho. And I have learned things from her.

    So .. perfect? No. But no one is. Effective, certainly. Useful, certainly. Occasionally bone-headed, sure.

    [Reply]

    MyLifeROI Reply:

    @Mike Leone,

    Mostly sound is a fair statement, but when someone seems to treat their own word as gospel when they don’t even follow it most of the time, I take issue with that.

    I agree with her being irritated. I have no problem admitting some of my issues with her may be intensified by a bias.

    The mantra “People first, then money, then things” sounds great. But that is another statement she often contradicts. Example: The recollection of her dad running back into the fire. Her takeaway? Money is more important than life itself.

    You are right about her effectiveness, and I guess that was the point of writing this. It annoys me.

    [Reply]

  5. Paul @ FiscalGeek Says:

    I have to agree with your post it’s really too sad of how here life view is shaped around money and even more so that so many people see her on Oprah and everywhere else with a statement like “Then he voluntarily risked his life and was severely injured. The money was that important. That was when I learned that money is obviously more important than life itself.”

    Is that how anyone wants to live their life? Money is necessary yes, but should it be the focal point? No!

    Paul @ FiscalGeek’s last blog post..Is your printer robbing you blind? Calculate your Electricity Usage with a Kill A Watt

    [Reply]

    MyLifeROI Reply:

    @Paul @ FiscalGeek,

    100% Agreed. Personal finance doesn’t exist in a vacuum. You can’t put money on a pedestal because it won’t think twice to put you in a hole in the ground.

    [Reply]

  6. meinmillions Says:

    Just like all PF gurus, you have to take what Suze says with a grain of salt. I think Suze does a great job of explaining things in layman’s terms especially the Young, Fabulous and Broke stuff. I like how she gets into some issues about how our past experiences shape our future attitudes about money in her books. Also like her “people first, then money, then things” motto. I agree that she can be very abrasive, but she’s a useful person to learn the basics from.

    meinmillions’s last blog post..Investment Update

    [Reply]

    MyLifeROI Reply:

    @meinmillions,

    I would prefer to learn the basics from sources that don’t contradict themselves, though.

    And in re: to that motto, as I said in an above comment, she doesn’t seem to stand by that, unfortunately :(

    [Reply]

  7. Des Says:

    I’m not a fan of Suze by an stretch of the imagination, but it really seems like you’re grasping at straws with your reasoning here. You say she would object to a caller buying a condo in a nicer area of town, but you’re judging her on your own speculation of what she MIGHT say. I suspect if her caller had a $20 million net worth she’d wouldn’t be that against it.

    You also say she “hasn’t walked the walk”. Sure she has. She got a windfall and did the responsible thing with it. Now, if she had blown the $250k, THEN you could say she didn’t “walk the walk”. Seems like she did the right thing there to me.

    Too much emphasis on money? Her occupation is in personal finance. What do you expect when you only know her “professionally”. I suppose my co-workers could say I place too much emphasis on computers, since I code on them my entire work day. I’m not sure how a personal finance adviser can place too great an emphasis on finances. If all she talks about with her family and friends in money, then yes. But, I suspect you’re not really in any position to determine that.

    I don’t mean to sound harsh, I’d just rather see a more rational presentation of the criticism.

    [Reply]

    MyLifeROI Reply:

    @Des,

    I have to disagree with you that I am grasping at straws. I never denied that I was speculating on what she would say to someone looking at real estate, but it is based on advice she has given in the past. She, like most personal finance advisers, chastises people for paying top dollar for something that is not necessary. She bought something at the top of a bubble (when a lot of people were saying the prices were unsustainable) in an incredibly expensive area. If you make $5,000,000 a year and spend $5,000,001 a year… you are still going into debt.

    And I don’t follow your reasoning on how she has walked the walk? She gives people advice on how to pay off incredible amounts of debt with average salaries. It is not atypical to hear her giving someone who has $100,000 in debt and a $40,000 salary advice. Does she really understand that? Sure, she can crunch numbers and let her empathy take over… but does she TRULY understand it? No, because she never experienced it. She was in a situation where she got one check for $250,000 and paid off her debt. The only time she has walked the walk, in this sense, is if she is advising someone on how to pay off their $2,000 in debt when they are expecting a $2,000 windfall next week.

    Yes, too much emphasis on money. Personal finance does not exist in a vacuum. Placing money over other facets of life can have a negative impact on finances. When she says that money is more important than life itself, she is placing too much emphasis on money. I don’t know how to compare it to your situation in an apples to apples way, though. She also says teachers have no self-worth because of their income. Again, is that a logical conclusion just because she is a PF adviser? I don’t think so.

    Your comment isn’t harsh at all and I thank you for taking so much time to comment. I look forward to your reply!

    [Reply]

    Des Reply:

    @MyLifeROI,

    You are taking that quote out of context. She did not say money is more important than life. She said that when her father risked his life for cash, that was the lesson that action taught her. There are numerous examples in the article you reference of her putting people above money and of trying to maintain a healthy relationship with money. (i.e. giving away her watch because it represented her poor relationship with money, telling people to cancel their order for her book and check it out from the library instead, her constant mantra of “people first, money second, things third”, etc.)

    You should probably restrict your judgment to things she actually said, rather than examples you made up yourself. The article also references an example of her telling a woman it was OK to buy a $3,000 BBQ after hearing a run-down of the caller’s financial situation. Financial advice is not always black-and-white, you-should-always-opt-for-the-cheapest-version. I know of no financial advisers who say that it is (though, I do know of some bloggers to think that way.)

    If you were trying to say that she doesn’t know what it feels like to inch your way out of debt on a $40k salary, then I agree with you. But you said she doesn’t “walk the walk” and doesn’t know how to pay off debt. I don’t think you have any valid evidence to back that up. Clearly she knows how to pay off debt, because she did it. Yes, she did it quickly and in a manner that not everyone is able to, but that is still “walking the walk”, just at a brisker pace. Her good fortune isn’t a reason to distrust her advice.

    It should also be noted that you are criticizing her person rather than her advice. Personal attack is a logical fallacy. Perhaps you could do an article and why her advice is unsound. That might be more useful.

    [Reply]

  8. MoneyEnergy Says:

    Wow, nice job on the article…. this is definitely more info on Suze than I’ve ever known! A good resource for anyone to link to whether or not they agree. I checked out one Suze Orman book last summer from the library. I forget which one. I think it was aimed at college kids. I skimmed through the first few chapters but it was clear that it was all this cookie-cutter type advice that didn’t apply to me or my philosophy. If you’re someone who’s fairly intelligent, critical thinker, and you’ve already done work to take your finances into your own hands…. then you’re not Suze’s target market. That’s just my opinion.

    But like Baker said, I respect her insofar as she’s ostensibly trying to help others and apparently working for a good cause. People who know her better will be better judges of whether those statements are adequate or not…

    MoneyEnergy’s last blog post..Personal Finance Bloggers Weight Loss Challenge – Why Team Epsilon Will Lose the Most Weight

    [Reply]

    MyLifeROI Reply:

    @MoneyEnergy,

    I figure everyone always hear the positive things, might as well make a post with the negatives, right? That should balance things out :)

    I think you are right that she is working towards a good cause, I just sometimes think it can be done better… and with less credibility ruining actions/statements.

    [Reply]

  9. Four Pillars Says:

    Wow, great post. I think Suze sounds like a bit of an idiot.

    I will say however that you don’t have to experience something directly to be an expert – studying a topic, thinking about it, talking with other people should be good enough.

    Four Pillars’s last blog post..Mad About Madoff

    [Reply]

    MyLifeROI Reply:

    @Four Pillars,

    Yeah, she esp. sounds like an idiot in the teacher comment.

    You can be an expert without having experience, but experience AND education will always trump just education. You won’t find experience in books. ;)

    [Reply]

  10. Jeff Rose Says:

    I will watch most of Suze’s shows just to keep up with what is her latest crazy ideas. The last show I watched was her recommending to dollar cost averaging completely out of the stock market by the time the investor was 60. She was recommending this on the premise that the investor would have protected significant losses in 2008. Hmmmm….isn’t hindsight such a beautiful thing? Anybody could say that and sound like a genius, but a 60 year old completely out of the stock market when interest rates are at historic lows is wreckless in my opinion. I have other qualms with Suze, but that’s just the most recent one.

    Don’t get me wrong, some of her basic advice is good and I’ve wrote some posts about them. But the jacket and the Dancing With The Stars spray tan have to go.

    [Reply]

    MyLifeROI Reply:

    @Jeff Rose,

    That’s hilarious. The fact that a CFP watches it to keep up with her crazy ideas shows who her target audience is. I hadn’t heard of that advice, but that does sound like pretty stupid advice that relies on hindsight. But that is getting more common and common.

    This seems to be the standard response: The basic advice is good, there are issues after that. I guess that is the problem with any cookie-cutter advice, though.

    [Reply]

    Roger Reply:

    @MyLifeROI, With respect to Jeff’s original point, I also watched the last episode of the Suze Orman Show (it’s one of the few half entertaining things on late on a Saturday night). What she was saying was that for a specific savings goal in the future (such as a house downpayment or child’s education) any money you will need within ten years should not be in the stock market, and that, if you had that money in the market prior to the ten year mark, you should start to dollar cost average out so all your money is in bonds and cash when you have five years to go. (I missed any comments about being completely out of the stock market by age 60 or being able to predict the 2008 crash; if she did say anything along those lines, it would contradict many of the good points she’s made elsewhere.)

    I will grant that she did not explicitly make a distinction between long-duration goals, like retirement, and the shorter lasting goals like those mentioned above. For the latter, going all bonds five years ahead of time makes sense, as you won’t have to worry about inflation taking a huge chunk of your gains or (hopefully) running out of money too soon. For things like retirement, though, I have a hard time believing she would suggest getting completely out of stocks to the average investor. (Again, though, this was nearly a week ago, and I don’t have a transcript or anything in front of me.)
    .-= Roger´s last blog ..Should You Still Invest in Stocks? =-.

    [Reply]

  11. Roger Says:

    When it comes to Suze Orman, I’m of two minds. On one hand, I like Suze’s advice; even when I don’t agree, there’s usually some element of truth to what she says. Most of the time when she is accused of something, a little closer reading shows she was misinterpreted (as I believe is the case with Jeff Rose’s comments). On the other hand, she has a tendency to shoot from the hip, and as this article illustrates, she can be surprisingly dim when doing so; the teacher comments were simply stupid.

    The hypocrisy and being out of touch comments, though, I think are a bit off base; yes, she may not have the same financial situation as her average viewer, but if we only take advice from financial planners whose situations closely resemble our own, we’re going to cut out a lot of good advice. Her success should not disqualify her from advising those who don’t have the same resources, even if their method of getting free is different (and tougher) than hers. And without knowing more about her living situation, I can’t say whether the more expensive apartment was worth the premium.
    .-= Roger´s last blog ..Should You Still Invest in Stocks? =-.

    [Reply]

  12. Jennifer Says:

    My husband is a teacher and that is our only real income. I am shocked at what she said about teachers. When we bought our house and put down 25% and when we refinanced at a lower rate, both companies were very pleased to hear that dh was a teacher. As they put it, teachers make sure they can afford the mortgage, teachers are more reliable to pay their bills and pay them on time, and both companies said that anyone who was a teacher had a much greater chance of getting a good loan. My husband has a lot more self worth paying cash for everything, performing well at a job he loves, and shaping children to become good adults than someone who has to borrow money to live from month to month.

    How can you feel good about yourself if you don’t make enough money to pay your bills? Many people don’t and take on a lot of debt (Which Suzi has frequently encouraged doing) in order to live what they consider a decent lifestyle. I can tell you that we sleep a lot better at night knowing that we have money in the bank and owe nothing to anyone except our mortgage. Not many people can say that. Teachers are some of the most responsible people when it comes to money. You mentioned the poor decision about the apartment she bought. Maybe she needs to take a lesson from teachers.

    [Reply]

    MyLifeROI Reply:

    @Jennifer,

    That makes two of us that were shocked…

    One thing that makes teachers reliable is tenure. So I can understand why the companies were glad to hear that a teacher was applying for a mortgage!

    You’re right about Suze encourage debt financing to some callers. She is a mess, IMO. And add to that this link: http://blog.mises.org/archives/010179.asp

    She apparently has no understanding of economics, either!

    Thanks for stopping by and commenting!

    MLR

    [Reply]

  13. Jonson Says:

    SHe is a fraud, and tricks the american sheeple.

    here is a simple equation and you dont need that suzie ormin show or her sappy/common sense books:

    dont go to college if you need massive loans, pay off your debt, live w/i your means, no cc debt, pay off monthly IN full, and invest in no load low fee mutual funds, only buy used cars.

    there you go.

    [Reply]

  14. Mac Cosmetics Says:

    I want to thank you for this informative read, I actually appreciate sharing this good post.

    [Reply]

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I'm MLR. After graduating from college debt free, I decided to write a blog encouraging people to adapt responsible and sensible personal finance rules.


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