In a recent exclusive interview with the Conferences for Women, Suze Orman—America’s best-known financial advisor to women—was characteristically outspoken money, the future of work, and more.
Orman, the author of 10 consecutive New York Times bestsellers and winner of two Emmy Awards, recently came out of a short-lived retirement to again advise women about a changing world.
“We are entering a new phase of how one works within this world that has absolutely transformed itself over the past year. It is very important that we have learned some vital lessons, as we are hopefully putting 2020 behind us,” Orman said. She predicts that financial markets will begin to stabilize in February or March of 2021 but emphasizes: “We are not out of this by any means yet. You better pay attention. This is time for you to really take heed.”
Here are highlights from the conversation, lightly edited for brevity and clarity:
Lessons from “the financial pandemic” of 2020
- “The first thing we’ve learned is that it’s not how much money you make; it’s what have you done with money you’ve made?” Orman said. “An eight-month to one-year emergency fund should be your #1 priority. If you haven’t already started to do that, you haven’t learned anything from what we went through.”
- “The next priority is to get out of any credit card debt. But do not close down your credit card accounts. Because of emergencies like this, you want to know you can put things on credit; but you can only do that if you have credit.”
- Third, you have to plan escape routes from a financial hurricane—where can you access money if you’ve used up your emergency funds and credit lines. In this case, if you own a home, Orman says, your next step should be to take out a home equity line of credit but don’t use it unless you need it.
The future of work
“You have to face reality and think about the chances that your job is going to be replaced. Don’t be so naïve to think that you’re not irreplaceable—because if you think corporations have not learned how much money they can save from not having individuals come in, I have a bridge to sell you. A lot of companies realize they can do just as well with fewer people and are cutting across the board.”
“That means you have to make the most intelligent financial decisions you have ever made.” Some questions to ask yourself:
- Are you fully funding your retirement?
- If you own a home, do you have a 15-year mortgage instead of a 30-year one?
- Are you taking advantage of refinancing at lower interest rates?
- Are you downsizing?
- Are you making every sensible move can make? Are you positive?
Be smart about money and your relationship
“When I was on CNBC, we would get 10,000 emails a day and let me tell you: There are money fakers out there [who say one thing and do another.] If you put your future in their hands it’s the biggest mistake you can make.”
“Ladies if you are in a relationship—the other person’s sex does not matter—you better go over your finances together at least every month. Check your FICA [the money that is taken out of workers’ paychecks to pay older Social Security retirement and Medicare] twice a year. Look at your credit scores. Have any accounts been opened up that you didn’t know about?”
“And, you better know what to do if you get divorced. Know a credit card cannot be shut down if the balance is not paid in full. I’ve heard of men who say I will pay it off and three years later you get a knock on the door saying your ex-husband filed for bankruptcy and never paid off the money and now you owe it.
“The same is true if you own a home together and the loan is in both names. If he is keeping the home, he has to buy out.”
“All of you better understand money and every move that you make with it. And what’s the best way to do that?” Orman recommends subscribing to her podcast, Women & Money.
Conquer the 3 internal obstacles to wealth—through action
“Fear, shame, and anger are the three internal obstacles to wealth because when you come from a place of fear, you don’t check your statement. When you make a move in the stock market because you’re afraid, you sell at the wrong time and buy at the wrong time.”
“When you have those emotions running, you will always make mistakes. So, you may not like what I’m saying. But the only way to conquer your fear is through action. All those credit card statements you are afraid to open? Go open them and call the credit card company and tell them you can’t make the payment. Or, if you know you probably won’t be called back to your job but are just waiting to see: Take action right now.”
Finally, do not think of yourself as a victim
“Don’t tell me can’t do anything because you have too much on your plate. If you do, get a bigger plate. Do you want to think you are a victim of circumstances? Fine but not on my watch because you are just wrong. You are one of the most powerful forces God ever put on Earth. Stand in your power, stand in your truth. Face your obstacles and overcome them.”
- Her latest book, The Ultimate Retirement Guide for 50+
- Her podcast, Women & Money
- Her app Suze Orman Women & Money Community