Phillip Q. Shrotman



Will I Ever Find Common Ground With Suzie Orman?

I find a number of  “so called” financial gurus to either be biased, totally wrong, or just plain not helpful. Sure, one should pay cash, stay out of debt and live within one’s means. Did you really need someone to tell you that?

Recently I came across suggestions from Suzie Orman. Every day she should start each morning, face Santa Barbara, and thank Opera!

There were 20 some rules, Ms. Orman presented to live by. I don’t have time or space to address each one. I’m sure there are some of her observations that are helpful. I don’t believe anyone could be zero for 20.

Let’s just begin with the first two items on the list.

(Please note that my comments are printed in italics)  

Best-selling author, TV host and personal finance guru Suze Orman has been inspiring Americans for decades to make better money moves and avoid serious financial mistakes.

Don't do with your money may be even more important than what you do with it." She'll be the first to tell you that what you don't do with your money may be even more important than what you do with it.

1. Don't be too quick to buy a home
Invest your extra money to buy your dream home
More —Homeownership is part of the American dream — but buying one before you're able can lead to financial disaster.

"Sometimes it makes sense to own a home," Orman tells "And sometimes, depending on where you live, it makes sense to simply rent."

—That's particularly true if you're in an expensive city. Instead of pouring a lot of money into property, Orman says why not invest in the stock market? That way, you can grow your savings — maybe into a down payment on that home of your dreams.

Use your “extra money” to by a home? Are you mad Suzie? Who has extra money, certainly not a first time buyer. Also, the idea that a young family should live in an unknown location, better to buy stock is preposterous! Saving for a home is serious business. Home prices in California are rising and there is a housing shortage. Yes, it’s possible to more further out of major town. At $4.00 per gallon, the commute alone might drive one into bankruptcy.

2. Don't lease a car

You should "you should never, ever ever ever, lease a car."

If you lease, you'll sink your money into several years' worth of car payments and be empty-handed when the lease term is done.

Financing is a better option, but Orman says if it will take longer than three years to pay off the car, then it’s out of your price range. (You certainly don't want to consider one of today's seven-year car loans.)

Buying a used car is another way to go. Models that are just a few years old will have great safety specifications and the same audio-visual tech as a new car, at a fraction of the price.

Here again is an example of Ms. Orman’s lack of understanding of the use of money. Many small businesses find leasing a depreciating asset, like a car or truck, a valuable tool. The lease may be a business expense and therefore be a tax deduction. For the entire term of the lease the auto is certainly under factory warranty. How about an out of the box suggestion? Lease the vehicle for three years and purchase it yourself at the end of the lease. The price will be half to three-quarters of the original sticker. In addition, you will be familiar with the condition of the car. Ms. Orman’s suggestion is to purchase a like car, probably for more money and take a gamble regarding the vehicle’s condition.

Yes, buying a car is preferable. So is paying cash for the purchase. I think she used three to many not ‘evers” when describing car leasing.