Suze Orman Fan Club Blog Community

Hi everyone!  There seemed to be a lot of positive notes about my “play by play” of last week’s episode of the Suze Orman Show.  I will be providing you all with a nice little recap for tonight’s episode to keep with the tradition.  Enjoy!

Suze’s opening remarks:
Suze dissected the process of gift giving.  I really like how she explains this.  Basically, she’s saying that with the holidays coming up, people are very likely to go out and spend lots on gifts for other people.  Suze warns: “If you put a gift onto a credit card, YOU CAN NOT AFFORD IT!”  She said this a couple of times to make it clear.  And then she went on to describe how the gift giving process will instead become a “burden giving” process.  Basically, by giving someone else a gift that is so expensive that requires a credit card, you would make that person feel bad and make them feel like they needed to get you a very extavagant gift in return.  So basically, you wind up with each party having a mess on their hands.  And yes, I LOL’d a little bit with the “Suze Family Story” because it just seems a bit strange that her sister sends an email out to the family to not buy gifts for anyone, yet Suze says, “Even though I have lots of money to give gifts, I will not do it because I don’t want them to feel the burden of giving me a gift.”  It just seems weird to hear someone in power actually practice what they preach (Sorry for the mini side-rant… I live in Chicago and I’ve been listening to our wonderful governor’s corruption all week).

Guest:
The guest was going to be getting married and her mother offered to flip the bill for the wedding.  Unfortunately, mom can not afford it because she was hit hard by the economy.  The guest was acting very wishy-washy about what she wanted.  First she was saying, “I don’t want mom to be burdened with this,” “Maybe I can just get eloped,” “Well, I shouldn’t get eloped because that’s not a normal wedding.” “Should mom just ride this out and we can get married in a couple years from now?…” and so forth.  Suze tells her to get her priorities together and figure out what she wants exactly for her wedding.   Suze recommends that the guest get eloped with her mother as a witness so that the mom can feel like a part of the wedding.  If mom can afford a wedding in several years for now they can then have a celebration.  Until then, they must live within their means and they are forbidden from going all out on spending for a wedding.

Phone calls:
Rex
Rex calls in.  His wife spends money like crazy and he has forced them to get separate bank accounts.  Despite doing this, he still had to bail her out after a few bounced checks and lots of credit card debt.  Suze plays therapist and asks Rex about his wife’s mental health since Suze proclaims that his wife must have low self worth to be spending so wildly.

Jennifer
Jennifer took an early withdrawal from her IRA.  She was penalized 20% in taxes.  Can she get that money back?  Apparently, you have 60 days to return the full amount from the date that you withdrew the money from the IRA in order to not be taxed.  Essentially, you are paying yourself back by putting the same amount you took out back in to the IRA.

Beyond the basics:
ETF- Exchange Traded Fund.  These are like mutual funds that are traded on an exchange.  You can buy an ETF for almost anything and everything that is on the stock market today— they give a very low commission to the broker and these can be bought/sold whenever the market is opened.

MUTUAL FUND- Many have high expense rations (commissions).

Bottom line: Suze reccommends you go with “NO LOAD MUTUAL FUNDS” or “ETFS.”  Suze emphasizes that you can only buy or sell a mutual fund until the closing price is listed.  So for example, you can put in an order at the beginning of the morning but the stock can drop so drastically during the day and then it will sell when the market closes.  Suze loves ETFs… so go with them!!!

More phone calls:
Latoya
Her husband received a promotion and he accepted it.  The new job is 2.5 hours away so they would need to relocate.  She would not be able to transfer her job to the new location and she feels like they can not afford it.  Suze starts by playing therapist again— she gets Latoya all riled up because Latoya’s husband never consulted with her and just accepted the promotion on his own accord.   Suze winds up talking through this with Latoya and they realize that if Latoya is able to get a new job and things go well with her husband’s job, then Latoya really should forgive her husband for not consulting with her and work hard on keeping the family unit together.

Can I afford it?:
Here we go!
-Daily Starbucks For Life for $1733.75/year — DENIED! (twice!!) (naturally, the woman just finished Med School and has like eleventy-billion dollars in expenses).
-Bugaboo Stroller for $1000 — DENIED! (mostly because she had no emergency fund)
-Vacation for 50th Birthday for $18,000 — APPROVED! (she had $2 million in investments, of course she was going to be approved)
-Amplifier and Subwoofer for $260 — DENIED! (Suze said these things drive her nuts plus the guy lives with his parents and makes only $800/month)
-Jumping and Walking Stilts for $275 — APPROVED! (this was amazing.  The guy was on the verge of being denied but told Suze he had something to tell her… so they took a break and came back.  The said man pops up on the screen and is bouncing on these stilts.  He tells Suze that despite being currently unemployed, if he has these stilts then he could possibly get a job bouncing around.  The job pays around $20-$40 /hour so the stilts would essentially pay for themselves)

EMAIL:
Side note before I go into this— what is up with Suze and Lou?  Can anyone please leave a comment about this because I find their relationship hilarious.  I want to know that I am not alone on this.

Ok– onto the email.  The writer wants to purchase municipal bonds.  Suze suggests using a financial advisor when buying these kinds of bonds because they are tricky.  HOWEVER, Suze warns about brokers that “make you broker.”  Note: the price of a municipal bond automatically includes the commission.  Ask the broker if they are charging more beyond what is on the list price.  Ask these two questions: “How much will it cost?  What is the yield?”  If the yield offered is higher and the price is lower, then your financial advisor is charging you too much!  1% should be the most commission that is being charged for by the broker.  Do NOT allow them to include a commission within the bond AND THEN add in their own fees on the side.

Final words:
Suze says for the second straight week that you should not do anything without knowing what you are getting yourself into.  Suze tries to ease the anxiety that people have when it comes to buying holiday gifts.  She offers her simple wisdom in order to know “what to do, what to do!” …… Always remember: “People first, then money, then things.”

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