Friday, October 26, 2012

Suze Orman Financial Tips....

For those in their 20's:

Suze's Tip # 3: Only Losers Eat Out Every Meal!
I fly private and I bring my lunch! No one works harder than me, and I never eat out! Working hard is not an excuse! Make your food and bring it to work with you. If you want to be a loser forever and continue to waste money, then fine by me. Stop giving yourself excuses. You'll never enjoy life if you continue to waste money. When I first became a stock broker, all the other stock brokers would go out to fancy lunches everyday. On the other hand, I went to taco bell, had two tacos and a diet coke and it cost me $2 a day. That's how I got to go out and still be OK.

Suze's Tip # 4 : You don't need to spend a fortune on designer clothes.
Honest to God, the amount of money they [young people] waste on designer clothes is the worst habit I've seen! Having to have the Jimmy Choos or $700 purse is ridiculous. Do you think anyone even cares?

Suze's Tip # 5: Clubbing is a huge waste of money.
The amount of money spent on clubbing is absolutely amazing! Go to each other's houses and have a great time in your home. You can buy a bottle of vodka for what it costs for one drink at a club. I mean $90 in one night? That's the amount of money needed to fund your Roth IRA every month.

Suze's Tip # 6: It's not about being so specific with how you divide up your salary.
It's hard to divide your salary into set percentages these days - salaries are just so low right now. If all you're making is $1000 per month, it's almost impossible to divide up, but all of you know when you're spending too much! It's not about being so specific, but if your rent is taking up 80% of your spending, then you're in big trouble.
The first thing you should do with your money is spend every extra dollar you have to get out of credit card debt, saving an 8-month emergency fund.

Suze's Tip # 7 : It's not about cutting everything out; it's about cutting a little bit off of everything.
Don't try to give up all your favorite things at once. If you go cold turkey, you will explode. Just cut down! You can indulge, but indulging doesn't mean every day. I mean come on! Do you really have to have Starbucks every day? Can you go clubbing twice a month instead of every weekend? Pick the things you really love to do and just do them twice a month.

Suze's Tip # 8: Start saving now!
The best thing you could do is to have a Roth IRA. You can withdraw any money you put into it at any time, without any taxes or penalties. That's where you should get money from, not your 401K or pension plans. You should be investing in individual stocks that pay a high dividend yield.

Suze's Tip # 9: Credit Card Debt isn't necessarily bad.
The thing is that credit card debt isn't bad,but if your interest rate is at 30% that's bad - actually horrific! A 1% to 2% interest rate is ok. If the debt is because you're trying to make your mark and make your way in the world, then I don't have a problem with that. If you have debt because of clubbing, excessive shopping and weekend trips to Tahoe, then you're an idiot - that's the debt that will do you in.

Everyone else:

Idea No. 1: You can't wait for the market to save you.
"The real estate market isn't going to come back until at least 2023," Orman predicted. "If you can't afford your home, you need to figure out what to do. You have to make a plan and that plan can't be that the market will save you." Similarly, if you see a house on the market that looks like a good deal, don't buy it. "Don't you dare," said Orman. Unless, of course, you can easily put 20% of the money down and pay the property taxes, mortgage and insurance comfortably with your current salary—and your job is secure. Then, as long as the house will be your primary residence, go right ahead.

Idea No. 2: Pay in cash
If you pay for something in cash, you won't have debt. It's as simple as that. If you have credit card debt, pay that off as fast as you can. (See Suze Orman in the 2010 TIME 100.)

Idea No. 3: Men need to stop pretending they know more about financial planning than they do. "Men are financial fakers," said Orman. When she worked as a financial planner, she said, married couples would come in for advice and "when the wife got up to go to the bathroom, I'd lay out this very complicated, totally made up plan for the husband. I'd say, 'You do this, and this, and this—are you following me?' and the husband would nod and say, 'Yes, Suze. To the letter.'" Then when the wife came back, she'd ask the husband to explain it to her and he couldn't. "Of course he couldn't! It wasn't a real plan!" Orman says that even today, men feel pressure to pretend like they know what they're doing. "That's how Bernie Madoff happened," she said. "One guy told another guy, who told another guy, who told another guy, and not one of them knew what they were doing." Women, on the other hand, have no problem asking someone to explain an idea to them again.

Idea No. 4: Save money.
Having eight months of savings in the bank so that if you find yourself without a job, you can still pay your bills.

And finally: LIVE BELOW YOUR MEANS!!!!

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