Personal Finance Gurus, I’m getting tired of your advice
Live below your means and throw all your money into the stock market for 30 years and never touch it. blah blah
With the market doing somersaults, you may break even within 10 years.
Suze Orman is not putting her money in a 401k (mutual funds) so why is she suggesting it?
Dave Ramsey – the bulk of his money is in his businesses.
Suze Orman estimated her liquid net worth at about $25 million, with another $7 million worth of houses. With just $1 million of that in stocks, it means that just 4% of her liquid net worth is in the stock market.
-source: Marketwatch
Both of these gurus have enough money to lose in the market so what do they care. I’m sure Dave has a limited amount in the stock market as well.
However, the majority of their listeners have the majority of their wealth in a 401k or mutual funds.
What does Orman do with the rest of her money? Deborah Solomon asked, and was told: “Save it and build it in municipal bonds. I buy zero-coupon municipal bonds, and all the bonds I buy are triple-A-rated and insured so that even if the city goes under, I get my money. I take a little lower interest rate to make sure my bonds are 100 percent safe and sound. ”
As for playing the stock market, Orman said “I have a million dollars in the stock market, because if I lose a million dollars, I don’t personally care.”
Do what personal finance gurus do, and not say.
Build a business like Dave Ramsey. Buy real estate and municipal bonds like Suze Orman.
Do what personal finance gurus do, and not say.
I know that Dave and Suze give good advice to some people I am not against them totally. They both have done well.
I just feel you should do your own due diligence when taking advice from any personal finance expert.
By they way, do you know anyone that solely became rich via a 401k?
Think beyond a 401k
I’m sure rich people became rich through building a business in addition to a 401k and perhaps real estate .
January 29th, 2009 at 11:00 am
I have never listened to Dave Ramsey or Suze Orman. I read stuff, so I don’t need them. Sure, that sounds arrogant, but I find that if you continually read and start with teaching yourself the basics, you’ll wind up elevating your knowledge and doning smart things with your money. If I’m going to get advice, I’m not going to get it from someone who speaks to a large audience in generalities (or irks my nerves).
January 29th, 2009 at 12:13 pm
I have listen to both and their advice is good for the average American, however I just wanted to say that they do not follow their own advice
They could have maybe for a few years/months. But they not definitely not doing it now.
The majority of their wealth is NOT in the stock market
January 29th, 2009 at 1:29 pm
Overall Dave Ramsey is ok, he somethimes gets too arrogant with his listeners as if he never made mistakes.
I think Suze and Dave give decent advice to those who really need it.
A person like me that is in good shape financially may not care for them. Actually I listen to myself and practice discipline w/o their advice
January 29th, 2009 at 1:31 pm
I believe Dave and Suze only have a low percentage of their wealth in the stock market
I will say if you do not know absolutely what to do with your financial life you need to call their show.
For the rest build wealth as others do- diversify Real estate, small business, stocks
January 29th, 2009 at 2:54 pm
Personally I have started to not listen to these self proclaimed gurus who tell you the benefits of investing in this and that.
Piss off and let me do my own research and education.
January 30th, 2009 at 6:05 pm
I like listening to what Ramsey says. I hate Orman’s voice… but I don’t follow what they say.
Let’s face it, what they give is basic advice for people who don’t really care about their money.
If you care about your money, you find ways to start a business for passive, sustainable income, or figure out your priorities in life (working half the year, making the same money as before – me)..
*shrug*
Fabulously Broke in the City
“Just a girl trying to find a balance between being a Shopaholic and a Saver.“
February 1st, 2009 at 12:21 am
I don’t care for Dave Ramsey – I’ve never had consumer debt, and he doesn’t say anything of interest to me. I do, however, watch Suze Orman for entertainment purposes as there is little else on TV on Saturday evenings.
I’d like to say this in her defense regarding her not following her own advice. Suze Orman has enough money that she can simply buy municipal bonds and live off tax free interest. Most of us can’t. A strategy that works if you have millions and can live off interest is not necessarily the correct one for someone in a different situation. Should Suze suggest municipal bonds to a 20-something caller with little money? He doesn’t even have enough money to buy individual municipal bonds much less live off (simple) interest paid twice a year as income. Before you bring up bond funds: bond funds != individual bonds. Individual bond is a fixed income investment; bond fund is not.
Suze’s advice is often different depending on the caller’s situation. Last year she suggested to a caller who inherited millions to simply put the money into municipal bonds. She told that the caller had enough money to live off interest and that there was no reason to risk it in the market.
She also routinely tells people to not put any money they might need within the next 10 years in the market. Last year she told a 50-something couple who had 200K mortgage on a second home where they planned to live in retirement and over 200K in mutual funds to sell mutual funds and to pay off the mortgage. She told them that the market is risky especially at the time, that they plan to retire soon, and that they don’t want to be paying mortgage in retirement.
We put money in the market because we think we need higher return to achieve our goals or because we are greedy. But the possibility of a higher return comes with higher risk.
Also – you all are mentioning opening a business as if it is any less risky than the stock market. But 95% of businesses go belly up. So every time you want additional return, you have to take risk.
One other thing. Why do you talk about 401K and mutual funds as if it is the same thing? Most 401Ks have stable value fund. I had over 40% of my 401K outside the stock last year. Contributing to 401K is not the same as investing in the market.
February 3rd, 2009 at 1:26 pm
I find Suze Orman really difficult to listen to. I don’t know if it’s her voice or her financial advice, but I can’t watch a whole show.
I thought it was just me, but Fabulously Broke and others feel the same way.
The only advice I take from Suze Orman is, “People First, Money Second”. The rest of her advice hasn’t been very useful to me, since I don’t make a ton of money from being on TV.
Having said all of that, I respect and appreciate anyone who is trying to get people to shape up their finances. Obviously, Suze and Dave have helped a lot of people. Millions of Americans could still use some help.
February 3rd, 2009 at 1:36 pm
I’m like kitty, I watch her for entertainment because there is nothing else regarding money on at that hour and day
-for as both gurus, they are very much needed for alot of people most Americans don’t know where to start with money and these two are very helpful.
It just becomes boring once you have did the entry level steps and looking for more financial advice.
I guess that’s when personal finance becomes boring.
February 3rd, 2009 at 2:57 pm
They made their money by selling their books and products
They are aggressive at this. They also sponser other companies.
I doubt they made it by living on beans and rice and living below your means, so most of us need to become mini capitalists!!
February 4th, 2009 at 8:18 pm
I watch both Ramsey and Orman, as well as several other TV financial advisors. I also read about 100 PF blogs every day. I ALSO do my homework and pick and choose from amongst all this advice to glean what works for me. This is the same stragety I use no matter what I’m trying to learn. No single other person is going to have the exact same situation you do. You shouldn’t expect their advice to fit you perfectly. One size definitely does NOT fit all, nor do I think that is their implication
February 10th, 2009 at 12:58 am
I’ve read both authors’ big sellers, and I’m sorry to say I didn’t glean the “401(k) will make you rich” message that others seem to have from their books.
In fact, I got the distinct impression that they believe an IRA is only there to cover your butt in retirement. Eventually you’ll stop working, your books will stop selling like hotcakes and your properties may burn. I gleaned that an IRA is an excellent way to make sure that even if all your investments take a dive, you’re still going to retire with dignity.
I see no hypocrisy in Ramsey and Ormans’ message… though their advice is not geared to the serious wealth building you desire once you’re out of debt. And solvency, indeed, is where personal finance gets boring. I’m hoping that I’ll uncover some more wealth-building blogs by the time I’m out of debt.
February 10th, 2009 at 9:07 pm
At the risk of stating the obvious, there is absolutely no contradiction whatsoever in Suzie Orman advising her mostly lower-middle class audience to do something that one doesn’t have to do after one already has $25 million.
But perhaps she should just advise them “do as I do: put about $1 million in the stock market but the other 96% in less volatile investments.” Yeah, THAT would be some good and helpful advice!
February 11th, 2009 at 11:40 am
lower middle class?
wellI guess I have graduated from watching Suze and Dave
February 11th, 2009 at 3:42 pm
I love hearing broke people trash others' financial advice.
"It would be real easy to not have any car payments if I was rich"
"It would be real easy to invest and grow my money if I was rich"
Has it occurred to you that that's how rich people become rich?
And btw…$100/month invested in a well spread out portfolio that matches the market's overall performance from age 18 to age 67 is $3.1 million. The stock market since its inception (including the Great Depression, World Wars I&II, The Vietnam War and the Carter administration and everything else) has averaged an 11.8% annual return. If investments underperform the market, you can still retire wealthy.
So, to answer your question about people getting rich off a 401(k), well I guess it depends on your definition of rich. I'll be happy with a few million and you can stay bitter with nothing.
February 12th, 2009 at 9:51 pm
I would like to point out that Suze Orman doesn’t have $1 million invested in the stock market, she has approximately $6.7 million dollars invested in the market.
I don’t get why people are bashing these particular financial advisers…obviously their base strategy worked, and they are employing more complex wealth-building tactics. Why not just stop listening to them and start watching what they’re doing? I sure am.
March 29th, 2009 at 3:00 pm
Here’s something to ponder. Let alone Orman and Ramsey, how many of those zillion, so called financial advisors, out there practice what they preach? Since they are soooo into net worth, ask them about their net worth and how they are increasing them. I’ve met few and they didn’t impress me much. I get more inspired from the ordinary people (like this financial blogger) who ACTUALLY practice the sound financial planning on a daily basis.
September 18th, 2009 at 1:58 am
Robert Kiyosaki got rich selling books. The Indian guy from "I will teach you to be rich" isn't rich himself at 24 years old then, and now 26. He got rich b/c people in America believed a 24-26 year old kid who wasn't rich could teach you to be rich! Now that is genius.
America rocks in that way.
Financial Samurai
January 24th, 2010 at 6:33 pm
It is easy to judge the things we see, but hard to see how the fit into the big picuture.
I believe that Dave and Suze stared out following the advice that they give to average americans. We have to understand that following their advice will only take you so far. At this point, you can afford to take on more financial risk.
Dave Ramsey recommend putting 15% of your income into 401K and Roth IRA while working the 7 baby steps. Once you have completed the 7 baby steps, he encourages his followers to build wealth in other ways.
Really when everything is said and done we should all have a small percentage of our wealth in the market.
February 19th, 2010 at 7:59 pm
I would never call myself a personal finance guru, but I am certainly a financial blogger and currently I'm 90%-plus in equities and have been since early 2009 (posts on the blog but it'd be rude to link to them here – i.e. not hindsight! The reason it's not hindsight is was throwing money into the market throughout the falls in late 2008… but the time March came I only had a modest amount of firepower left. Yet in it went).
Anyway, my point is do what works for your psychology I guess. These characters are clearly skilled business people. Equally most investors should go nowhere near the volatility of big equity portfolios. (It's not my long term ideal, but government bonds look appalling at the moment. I have money in commercial property though, and in an unlisted private company shareholding).
February 20th, 2010 at 12:59 am
I would never call myself a personal finance guru, but I am certainly a financial blogger and currently I'm 90%-plus in equities and have been since early 2009 (posts on the blog but it'd be rude to link to them here – i.e. not hindsight! The reason it's not hindsight is was throwing money into the market throughout the falls in late 2008… but the time March came I only had a modest amount of firepower left. Yet in it went).
Anyway, my point is do what works for your psychology I guess. These characters are clearly skilled business people. Equally most investors should go nowhere near the volatility of big equity portfolios. (It's not my long term ideal, but government bonds look appalling at the moment. I have money in commercial property though, and in an unlisted private company shareholding).