14 Reasons to Not Listen to Suze Orman

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11. Orman is a Millionaire Her Advice May Not Fit Your Financial Situation

The more successful a person becomes, the less he or she can relate to the plight of everyday people. It’s just human nature. Suze Orman is worth somewhere between $10 million and $30 million, which is far more than the vast majority of people who follow her advice are worth.

Life looks a lot different when you have that kind of money. An eight figure bankroll simply gives you a different perspective, and that affects your ability to process what’s happening from an emotional standpoint.

When you’re worth millions of dollars, it can be hard to appreciate the role that fear plays in a person’s decisions.

For example, if you have $10,000 to your name, the consequences of investing the money and getting it wrong can be disastrous. But from the ivory tower of a millionaire, investing money aggressively when you have a small pile of it can be seen as the only way to move forward.

Perspective changes everything, and Orman is simply on a different financial plane from her disciples.

Bonds and CDs

Bonds and certificates of deposit, or CDs, are considered safe investments. Both offer only modest returns but carry little or no risk of principal loss.

Bonds are a way for companies and governments to borrow money. Think of them as an IOU.

When you buy a bond, you’re lending money to the company or government that issued it. The bond issuer promises to pay you back for that amount, plus interest, at a specific time in the future.

Did You Know?

Bond prices and interest rates share an inverse relationship, meaning that when interest rates fall, bond prices tend to rise.

There are three main bond types:

Corporate Municipal U.S. Treasuries

You can purchase federal bonds online through a program on the Treasury Direct website. This helps you avoid paying a fee to a broker or other money manager.

Most interest earned through bonds issued by U.S. state governments and municipalities is exempt from federal income tax. Some escape taxation at the state level, too. For example, U.S. Treasury securities are exempt from state income taxes. Also, most states don’t tax interest on in-state municipal bonds.

Like a bond, CDs hold a fixed amount of money for a certain amount of time, such as six months, one year, or 10 years. When you cash in or redeem your CD, you receive your initial investment plus any interest.

By placing funds into a CD, you promise to keep your money in there for a certain period of time. You’ll usually face penalties for early withdrawals.

Unlike bonds, which are purchased from a company or government, most CDs are purchased through a bank or credit union. A CD bought through a federally insured bank is insured up to $250,000. The only real risk with CDs is the possibility that inflation will grow faster than your money, thus diminishing your returns over time.

Bonds and CDs help round out diverse portfolios. But if you’re young and far from retirement, it makes more sense to put a bulk of your investments into more growth-oriented assets, such as stocks and mutual funds.

What Is a Certificate of Deposit?

9. Suze Doesnt Always Follow Her Own Advice

While championing stocks for all, Suze invests her own money primarily in – drum roll – municipal bonds!

You always have to be careful of any expert who operates under the premise of “do as I say, not as I do”. When you’re a financial guru doling out advice that others are relying on, the hypocrisy is not just glaring.

It’s intolerable.

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